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How do I Choose the Best Hedge Fund Database?

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  • Written By: Geri Terzo
  • Edited By: A. Joseph
  • Last Modified Date: 29 August 2016
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    Conjecture Corporation
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Choosing the right hedge fund database can be vital in performing the proper research and due diligence necessary to make a successful investment. There are many platforms from which to choose, so you should determine from the onset certain parameters that are vital to know, such as the type of hedge fund strategy you are interested in choosing in addition to the amount of money you have to invest and the size of the hedge fund you're interested in tracking or investing in. Certain databases might specialize in a hedge fund of a certain size or strategy, so you want to make sure that this type of detail is available before you make a selection.

Using a hedge fund database is a component of hedge fund research. You might, for instance, want to uncover a diversified portfolio that is composed of various different securities with exposure across different regions. A hedge fund database can help you to narrow your selection based on those criteria. Some other criteria that will become accessible via a database include the size of a hedge fund investment, the history or track record of a particular fund, the professional background of money managers and the size of the combined assets that a hedge fund oversees.

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Before making a selection, make sure that the database you are considering represents a good portion of the vast hedge fund universe. Every hedge fund database company worth considering will do some marketing of the service. You should be able to tap into that information before making any selection. This becomes increasingly important if you are choosing a hedge fund database that charges a fee. Some hedge fund databases do not charge the hedge fund for inputting information, but end users or investors are charged a fee.

Research also an essential part of any hedge fund database firm. If you are going to determine which hedge fund to invest in based on the information provided in the database, make sure that there are certain controls in place at the database company to prevent or make it difficult for incorrect information to appear. The extent of accuracy on the database will depend on the resources in place at the firm, including manpower, software and talent. Some database firms don't charge the hedge fund for inputting information, so it becomes increasingly important to be sure that the database staff is monitoring the entries.

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