Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
New York (HedgeCo.net) – According to an arbitration claim filed by Florida law firms, Vernon Healy and Dovin Malkin & Ficke, GenSpring Family Offices failed to adequately diversify the $57 million portfolio of an ultra high net worth individuals and misrepresenting itself by saying that the hedge funds it recommended would perform like bonds.
The legal claim filed on behalf of a retired Florida entrepreneur seeks more than $11 million, including rescission of more than $6 million in hedge funds that are now illiquid that GenSpring represented would be “as safe as bonds with upside.” GenSpring also represented that the multi-strategy hedge funds would be far more liquid than they have turned out to be, according to the claim.
The Dovin Malkin & Ficken and Vernon Healy team are representing ultra high net worth individuals in an aggressive nationwide investigation of GenSpring Family Offices. The team previously filed an additional claim charging that GenSpring failed to diversify the $30 million portfolio of an ultra high net worth investor.
“These funds had a severe lack of transparency and control attributable to the fact that their multiple managers in the various sub funds could employ essentially any strategy they chose at any particular point in time. Thus, GenSpring could not adequately determine what strategies these managers were following, and whether these strategies provided ‘bond-like’ risk,” according to the claim filed today by the team led by securities fraud attorneys Chris Vernon and Ed Dovin.
The retired entrepreneur’s colleague, trained as a CPA, began raising concerns about the hedge funds in the investor’s portfolio in late 2007 and 2008, according to the claim. GenSpring repeatedly dismissed the concerns and sought to dissuade liquidation of the hedge funds by the investor, the claim asserts.
Prior to the financial crisis, the hedge funds with purportedly bond-like risk recommended by GenSpring were actually moving in lock step with equities and GenSpring was aware of that fact, according to the Vernon Healy and Dovin Malkin & Ficken claim.
“In truth, and contrary to its representations, GenSpring did not have a reasonable basis to believe that multi-strategy hedge funds would perform like bonds, provide diversification from equities or remain liquid in the event of a need to reallocate,” the claim states.
GenSpring Family Offices is owned, in part, by a wholly-owned subsidiary of SunTrust. GenSpring has stated it has more than $17 billion under management and its clients are among the wealthiest families in the world.
In addition, the Dovin legal team has already received a $1.3 million arbitration award — representing a win — against GenSpring in which the arbitrator found that GenSpring breached its fiduciary duty when it used hedge funds instead of bonds for much of the bond risk portion of that investor’s portfolio.
You can skip to the end and leave a response. Pinging is currently not allowed.
Risk.net – The newly born Korean hedge fund market has made swift progress – but regulatory obstruction makes it difficult for funds to get both clients and prime brokers.
Following a three-year gestation period, the Korean hedge fund market burst into life on December 23, 2011. By the end of February 2012, 12 Korean managers had registered 17 funds with a total of $500million of assets under management – and market observers are bullish there is much more to come.
BusinessWeek – The U.S. Securities and Exchange Commission will oversee hundreds more private advisers at hedge funds and private equity firms than it first predicted, expanding the reach of one of the most controversial requirements of the Dodd-Frank Act.
The managers of such investment funds face a deadline today to register with the SEC. The agency expects to receive about 1,300 registration applications, according to SEC spokeswoman Judith Burns. That is about a 70 percent increase from the 750 advisers the agency said as recently as July that it expected to register. Burns didn’t explain why the number is higher than the agency estimated earlier.
Reuters – Brevan Howard, one of Europe’s largest hedge funds, asked Royal Bank of Scotland PLC to change the LIBOR rate, a former trader for the British bank said in court documents filed in Singapore.
RBS said earlier this month that some of its staff were being investigated as a part of global probes into whether traders at banks tried to influence LIBOR lending rates, the benchmark for around $360 trillion in financial contracts.
CNNMoney – The highest earning hedge fund manager of 2011 essentially won the equivalent of seven of the current $540 Mega Million jackpots last year.
Bridgewater Associates’ Ray Dalio’s reward for his bets on where the markets were heading: $3.9 billion, according to Absolute Return‘s list of the top-earning hedge fund managers.
New York (HedgeCo.net) - A new act passed by the Senate and House of Representatives is expected to be signed into law by President Obama within days. The Jumpstart Our Business Startups, known as The Jobs Act, will eliminate a longstanding ban on general solicitation and advertising by hedge funds.
Hedge Fund Review Magazine reports that US hedge funds will, for the first time, be able to solicit investors freely and advertise their funds through mass media channels, from television adverts to newspapers articles and websites.
“This is obviously a monumental development in the industry, lifting the general solicitation ban for hedge funds.” Evan Rapoport, founder of industry portal HedgeCo.net, said. ”It’s easy to imagine a world where the largest hedge funds are purchasing spots on CNBC. The industry has operated since the days of Alfred Winslow Jones under the basis of no general advertising, but I think we are moving closer to a point where hedge funds themselves will resemble the mutual fund industry. We already see transparency mandates causing funds to report holdings, the proliferation of UCITS funds with daily liquidity, and now general solicitations move us one step closer to the inevitable.”
The act is important to hedge funds as it tells the SEC to remove the prohibition on “general solicitation of general advertising” on offerings or sales of private funds and securities made under Regulation D of the Securities Act of 1933.
The Managed Funds Association (MFA), says the new rules will “modernise existing securities laws in a manner that will enhance financial market transparency and investor protection”.
However, regulators have started to raise concerns about the rule change, commissioner Luis Aguilar said the legislation would be “a boon for boiler-room operators, Ponzi schemers, bucket shops and garden-variety fraudsters by enabling them to cast a wider net and making securities law enforcement much more difficult”.
Opalesque - In 2009, Jean-François Tardif retired from Sprott Asset Management as one of the top hedge fund managers in the industry. Since then, he has been living a quieter life in Canada. Now, he is coming out of retirement and has been hired by Toronto-based First Asset Investment Management Inc. to run a new closed-end hedge fund.
The fund will list on the Toronto exchange in May. The new fund – JFT Strategies Fund will be Long/Short Equities based. First Asset Management has approximately $2.6bn in total assets in addition to the new fund. Tardif has also launched his own firm – Timelo Investment Management Inc.
ZeeNews – British hedge fund The Children’s Investment Fund Management has served a notice to the Indian government for alleged violations of international treaties related to its investments in Coal India.
The latest salvo comes close on the heels of the UK hedge fund threatening to initiate legal action against the board members of state-run Coal India Ltd (CIL) for failing to protect the interest of minority shareholders.
Greenwich Times – The manager of a Greenwich hedge fund who is married to a U.S. congresswoman has purchased a 75 percent stake in the financially struggling company that owns The Portland Press Herald and two other daily newspapers in Maine.
S. Donald Sussman’s Maine Values LLC previously announced it would provide a $3.3 million loan for a 5 percent equity stake and a seat on the board of MaineToday Media. The final restructuring plan, completed Tuesday, calls for Maine Values to provide the same amount of money as a straight stock purchase.
Maples Fund Services, a leading independent global fund services provider and a division of MaplesFS, has been honoured as Best European Administrator for Small and Start-up Firms by HFMWeek.
The award comes on the heels of MaplesFS’ launch of its Incubator product, which is a dedicated offering for prospective and start-up managers. The Incubator product allows the prospective fund manager to build a credible, verifiable track record using premier, independent service providers in advance of the decision to go public and launch a full investment fund. MaplesFS supports these managers in establishing a track record and grows with them as they progress beyond the incubator stage, targeting capital from larger investors with more rigorous due diligence and reporting requirements.
“Professional investors expect an institutional infrastructure and this can be a challenge for small and start-up fund managers. With the backing of a robust operating model and infrastructure, our offering provides a solution to managers emerging in this tough environment,” Toni Pinkerton, Global Head of Fund Services, said.
HFMWeek’s European Hedge Fund Services Awards recognise service providers that have performed exceptionally over the past year. Companies are evaluated by a panel of independent judges made up of industry experts on a range of criteria, including client satisfaction, innovation and revenue growth.
Last year Maples Fund Services was honoured as Best US Administrator under $30 billion for Funds of Hedge Funds by HFMWeek, Best European Administrator under $30 billion – Innovation by HFMWeek, and European Hedge Fund Administrator of the Year (AUA < $100bn) by ICFA Magazine.
About Maples Fund Services
Maples Fund Services is an independent global fund services provider. It has offices in leading financial centres, including the Cayman Islands, Dubai, Dublin, Hong Kong, Luxembourg, Montreal and New York. The firm provides a wide range of services to onshore and offshore funds. The firm’s clients include investment management firms, institutional investors, pension plans and global financial institutions. Maples Fund Services is led by a team of experienced professionals and is committed to providing a high level of service, tailored to specific client requirements.
You can skip to the end and leave a response. Pinging is currently not allowed.
Reuters – Hedge fund managers are increasingly nervous about getting a knock on the door from U.S. securities regulators now that a new rule requires them to register as investment advisers and provide lots of data about their inner workings as a result.
Hundreds of large managers, which already employ sizable legal teams, took the mechanics of meeting the March 30 deadline in stride, industry consultants say.
Charlotte, North Carolina – Financial Research Associates (FRA) is proud to bring back the highly acclaimed 4th Annual Mastering Due Diligence for Alternative Investments conference to New York City at the Princeton Club of NYC on Tuesday, April 3 and will continue through Wednesday, April 4, 2012.
This event will cover a variety of topics, including: Specific examples from institutional investors about what they expect from their fund managers; How to effectively handle the complex valuation process; Innovative transparency, liquidity, and control (TLC) initiatives; Mitigating counterparty risk and protecting assets; Thorough background checks that go beyond just your investment managers; Operational due diligence from all angles; Regulations: from Dodd Frank to AIFM Directives and everything in between; Effectively integrating wide-ranging investment, operational, and compliance due diligence; Digging deeper for emerging managers…and more!
Notable speakers include representatives from Pacific Alternative Asset Management Company LLC, Yeshiva University Investment Office, Castle Hall Alternatives, Protégé Partners LLC, Southport Harbor Associates LLC, The Regulatory Fundamentals Group LLC, Terra Foundation for American Art, FQS Captial Partners (U.S.) LP, Skyview Investment Advisors LLC, Mercer Sentinel Group, MD Sass, Neuberger Berman, Jones Day, Joseph Decosimo and Company PLLC, Skybridge Capital, Franklin Park, Pacific Life Insurance, Arden Asset Management LLC, ABS Investment Management, Drexel University, Pension Consulting Alliance, Morgan Creek Capital Management LLC, Opus Prize Foundation, Broadmark Asset Management LLC, Dahab Associates, Inc., Merlin, PPCA, NEPC LLC, TIAA-CREF, and Luxembourg Investment Solutions S.A.
Financial Research Associates (FRA) provides the financial community with access to businesss information and networking opportunities. Offering highly targeted conferences, FRA is a preferred resource for executives and managers seeking cutting-edge information on the next wave of business opportunities. For additional information on Financial Research Associates (FRA), please visit their website at: www.frallc.com.
You can skip to the end and leave a response. Pinging is currently not allowed.
New York (HedgeCo.net) – According to an arbitration claim filed by Florida law firms, Vernon Healy and Dovin Malkin & Ficke, GenSpring Family Offices failed to adequately diversify the $57 million portfolio of an ultra high net worth individuals and misrepresenting itself by saying that the hedge funds it recommended would perform like bonds.
