Evaluating hedge fund performance differs significantly from the analysis used in other investments because of their risk/return characteristics and unique strategies. Robust analytical software will provide not only the metrics mentioned above, but also a variety of other metrics that can add insight into the performance of a particular fund. The list of metrics can be endless and every analyst tends to gravitate toward a group of select favorites that provide enough information to determine whether due diligence should continue.
The further along a fund gets in the due diligence process, the more likely other metrics will be considered and analyzed. Keep in mind that one can analyze any fund to the point of finding something wrong with it and that this is not the goal. Instead, investors should strive to understand metrics well enough to properly evaluate a portfolio.