Operational reviews gain traction

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Inviting an outsider to review - and judge - internal operating procedures might not seem like an idea hedge fund managers would naturally glom on to. After all, the industry is known for keeping secrets. But this very idea is, in fact, gaining traction as more funds sign on for operational reviews by the industry's two providers: Amber Partners and Moody's Investors Service.

Amber, which introduced its certification program in November 2005, now counts more than 30 funds whose managers handle some $25 billion in assets. Moody's, which hasn't officially launched its operational rating service, is preparing ratings