EMA’s Investment audit is conducted in accordance with CFA Institute Standards of Professional Conduct specifically, Standard I(B) Independence and Objectivity and Standard V(A) Diligence and Reasonable Basis
EMA’s audit is a due diligence of the various aspects related to investment products as of a date and does not extend to any later periods for which EMA is not engaged as investment auditor.
EMA’s audit does not include legal advice or functions carried out by a third-party administrator such as anti-money laundering checks, or KYC and OFAC compliance.
The opinions represented on various aspects of the investments are good faith views of EMA as of the date of its report, subject to change at any time and do not attest to the success of the investment in any way
The investment audit reports carry opinions on most qualitative and quantitative aspects of the investment and helps transfer knowledge from GPs to LPs to enable LPs engage in advanced dialogues and verification exercises with GPs leading to informed decisions either on their own or in consultation with their financial advisors
The investment audit neither provides buy/sell investment recommendation, tax or legal opinion nor is an offer to buy or sell an investment
EMA’s audit is not directed toward examining whether the disclosures related to the investment in the private placement memorandum and/or marketing materials of the firm are free of material misstatement
Information used to prepare audit reports is obtained primarily from investment managers supplemented with any publicly available third-party information/analysis
EMA does not conduct any formal criminal background check on any of the officers/principals of investment managers and thus cannot verify any criminal activities, if any, of any of the investment managers’ officers
EMA’s investment audit is not geared toward detecting fraud or business misconduct in the managers’ operations
EMA does not act as a placement agent and is not compensated by GPs for capital commitments from LPs. EMA’s revenues are purely driven by its audit work not linked to audit findings or LP commitments to any opportunity.
In addition, it is the managers’ responsibility to inform investors the following characteristics of alternative investment strategies including hedge funds, real estate and private equity:
Past performance is no guarantee of future results.
Performance can be volatile and investors could lose all or a substantial portion of their investment
Leverage and other speculative practices may increase the risk of loss
Past performance may be revised due to the revaluation of investments
These investments can be illiquid, and investors may be subject to lock-ups or lengthy redemption terms
A secondary market may not be available for all funds, and any sales that occur may take place at a discount to value
These funds are not subject to the same regulatory requirements as registered investment vehicles
Managers may not be required to provide periodic pricing or valuation information to investors
These funds may have complex tax structures and delays in distributing important tax Information
These funds often charge high fees
Investment agreements often give the manager authority to trade in securities, markets or currencies that are not necessarily within the manager’s realm of expertise or contemplated investment strategy