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Frequently Asked Questions

Question: Can we purchase coverage to protect against fraud?

Answer: Yes. There are several products in the market that provide insurance protection against fraud. The best of these policies was created by Protean Investment Risks, underwriting on behalf of Munich Re, Catlin and a number of Lloyds syndicates and is available in the U.S. through Hedge Fund Insurance, a division of Frenkel & Co., Inc.

Protean offers two distinct policies:

Policy for Investors
This policy can be written for (a) Any individual or corporation that invests in hedge funds; or (b) Other entities including fund of funds, family offices, pension funds, universities, and foundations. The policy covers the loss you incur in your portfolio of investments as a direct consequence of a fraud perpetuated by a hedge fund manager or employee thereof.

Policy for Hedge Funds
This product, called Protean Asset Protect, allows hedge fund managers to buy fraud protection for their clients, and promote their fund(s) to investors as having the "gold standard" of fraud protection covering the actions of the hedge fund managers themselves (not just employees) and third party service providers against misappropriation of funds and NAV fraud.

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