I was wondering what sort of due diligence a fund of fund hedge fund manager does when assessing single-manager hedge funds?

According to a statistic I read in the Financial Times, 50% of hedge funds failed due to failures in operational practices.

I would suggest that the following 3 are of extreme importance:
1. complete evaluation of the investment strategy and process
2. assessment of the business systems, infrastructure, portfolio pricing and operational issues
3. qualitative assessment of trust and confidence placed in partnership aspects of the hedge fund

The manager would need to conduct in-depth meetings and interviews with:
• key investment professionals, traders and research analysts
• key support and back office professionals

Here are some of the questions normally asked:
1. Who is responsible for the business aspects of the hedge fund?
2. Who is responsible for the running and administrative aspects of the hedge fund office?
3. What is the integrity of the hedge fund’s portfolio trading systems?
4. What is the process and frequency of pricing the portfolio from the perspective of the hedge fund’s investment manager?
5. What is the process and frequency of pricing the hedge fund’s portfolio from the perspective of the administrator or other third party pricing service such as an auditor or pricing service?