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NEW YORK, Jan. 25, 2012 — The Dow Jones Credit Suisse Hedge Fund Index team today released its 2011 Hedge Fund Market Review. The report examines the drivers of hedge fund performance and asset growth in 2011. Some key conclusions from the report include:
Hedge funds, as measured by the Dow Jones Credit Suisse Hedge Fund Index, finished the fourth quarter up 0.71%; however, the overall performance for the year was down 2.52%;
The industry saw an estimated $15 billion in inflows in 2011, bringing overall assets under management for the industry to approximately $1.71 trillion. Assets have remained relatively stable, up 1% from 2010;
The Managed Futures and Fixed Income Arbitrage sectors experienced the largest asset inflows on a percentage basis in 2011, with inflows of 23% and 19% respectively;
On an industry-wide basis, a larger percentage of asset inflows went to funds with monthly or better liquidity, suggesting greater investor demand for liquid hedge fund structures; and
Overall, hedge funds, as represented by the Dow Jones Credit Suisse Hedge Fund Index, continued to provide positive risk-adjusted returns relative to other strategies.
The report also offers insight into hedge fund performance in the month of December. All industry commentaries and publications are available in the Industry Research and Commentaries section at www.hedgeindex.com . Click here to view the 2011 Hedge Fund Market Review.
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HedgeCo.Net (New York) – Hedgeharbor Inc., a wholly owned subsidiary of Asset Alliance Corporation that specializes in investment placement services to institutional investors and high net worth individuals, has recently completed their Annual Global Investor Survey.
Survey questions address such topics as: favored investment strategies, anticipated future performance of certain strategies, track record and AUM requirements, methods of access, as well as various analytical factors that are most highly regarded throughout the due diligence process.
The increasing appeal of smaller emerging managers over last year is quite evident. The percentage of investors that were willing to look at managers with less than $25 million in AUM doubled from 15% to 30% between 2010 and 2011.
Evan Rapoport, CEO of HedgeCo Networks a hedge fund firm which tracks over 7000 hedge funds voice his opinion, which concurs with the findings of this study. “We have continuously seen an increased number of allocations to emerging hedge funds over the last 10 years.” Evan Rapoport said “Our data shows that emerging funds outperform their more established counterparts by 3-5% per annum. Therefore it only makes sense that the appetite for these funds will continue to grow.”
When asked which single-manage strategies investors find most interesting, traditional hedge fund strategies such as Equity Long / Short, Event Driven & Market Neutral came to the fore. Convertible Arb, Global Macro & Distressed Debt strategies saw a decline in interest from 2010.
“Despite a difficult market environment in 2011, investors remain resilient in their convictions that alternatives will outperform in 2012” said Arnold Mintz, President of Asset Alliance and Global Head of Hedgeharbor, “Market challenges, however, underscore the need to engage investors with a solutions-based approach that emphasizes finding managers who not only have investment expertise and stellar track records, but also the infrastructure and capabilities to serve the changing needs and requirements of investors.”
New York (HedgeCo.net) – Financial Research Associates (FRA) and the Hedge Fund Business Operations Association (HFBOA) are proud to bring back the highly acclaimed Optimizing Hedge Fund Business Operations to New York City at the Princeton Club of NYC on Tuesday, January 10, 2012 and will continue through Wednesday, January 11, 2012.
This event will cover a variety of topics, including: Regulatory Update, Tax and Legislative Update, How to Survive in a Post-Dodd Frank World, Technology Update, Investor Roundtable – What Investors Want from their Fund Managers, The Increased Role of Corporate Governance and the Board of Directors, Due Diligence from All the Angles, CCO Roundtable – The Nuts and Bolts of an Effective and Cost-Efficient Compliance Program, Marketing and Fundraising Strategies in Today’s Environment, Mandatory Clearing Requirements for OTC Derivatives, SSAE 16 (aka SAS 70) – The Evolution of Internal Controls and Reporting, Preparing for and Surviving an SEC Audit, Successfully Addressing Key Valuation Issues, Coping with Separately Managed Accounts Platforms.
Notable speakers include representatives from the U.S. Securities and Exchange Commission, Herbert L. Jamison & Co. LLC, Smarsh, Millburn Ridgefield Corporation, Conatus Captial Management, Chilton Investment Company, Tiedemann Wealth Management, Protégé Partners, LLC, MD Sass, Morgan Creek Capital Management, Ropes & Gray LLP, Larch Lane Advisors LLC, Pacific Alternative Asset Management Company, 360 Global Capital, TIAA-CREF, BNY Mellon, Marcum LLP, Seward & Kissel LLP. Notable participants include Marc Abel, Chief Financial Officer, Dabroes Management LP; Gerald Cavataio, Chief Executive Officer, Meadowdale Capital Partners Management LLC; Daniel Federmann, Senior Managing Director, Chief Operating Officer and Co-Head of Operational Due Diligence, Protégé Partners LLC; Duncan Huyler, Chief Financial Officers, 360 Global Capital; Kurt Koeplin, Chief Financial Officer/Chief Operating Officer, Rail-Splitter Capital; Eric Lazear, Head of Operational Due Diligence, FQS Capital Partners; and George Roeck, Chief Operating Officer/Chief Financial Officer, Charter Bridge Capital.
Financial Research Associates is registered with the National Associates of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors and this conference allows participants to earn up to 15 continuing professional education credits. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit.
About Financial Research Associates:
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.
About The Hedge Fund Business Operations Association:
The Hedge Fund Business Operations Association (HFBOA) is an industry-run association. Our mission is to support hedge fund CFOs, COOS and CCOs and their need for networking opportunities, provide an unbiased platform to exchange new ideas, and develop a forum/clearinghouse of pertinent information about hedge fund business operations. To achieve this goal, the association focuses on provided hedge fund operations personnel with reliable and practical information through industry updates, articles, educational summits and useful web links. For additional information on the Hedge Fund Business Operations Association and to join, please visit their website at: www.hfboa.org.
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New York (HedgeCo.Net) – McGladrey & Pullen, LLP announced today that it has completed the acquisition of RSM McGladrey, Inc. from H&R Block, Inc., and is returning to a traditional partner-owned CPA firm structure. McGladrey, the fifth largest U.S. assurance, tax and business consulting firm, also named national and regional leaders.
“Today marks a significant milestone for McGladrey,” said Joe Adams, managing partner and CEO for McGladrey. “As a reunited firm, we can effectively and efficiently provide our clients with seamless access to world-class resources to drive their success. Growing organizations — from owner-managed businesses to public companies and national nonprofits — have unprecedented challenges and opportunities in the face of new regulations, economic uncertainty and globalization. McGladrey has deep understanding of the issues these organizations face and unparalleled experience to help them reach their goals.”
In the past 18 months, McGladrey has opened a national tax office in Washington, D.C., realigned its business consulting services, launched a new brand and opened various international service desks to support its domestic clients with international operations and foreign clients looking to expand into the U.S.
“McGladrey is building on a foundation of strength, and we will continue to make significant investments in talent and in our brand,” said Adams. “In November alone, we hired more than 450 entry-level assurance and tax professionals, and we renewed our sponsorship of The McGladrey Classic – a PGA TOUR Fall Series event.”
FIRM LEADERS NAMED
Concurrent with its return to a traditional CPA firm structure, McGladrey named a leadership team to oversee its strategy and primary lines of business.
“The management team includes proven McGladrey leaders such as Mike Kirley, who led the firm’s international growth strategy; Doug Opheim, who led the acquisition financing team; Jim Morton, who introduced operational efficiencies and new technologies into our assurance practice; Jeff Johannesen, who has been instrumental in growing McGladrey’s tax business in the West; and Gary Sturisky, who has built a top-notch consulting practice since joining as its national leader in July 2010,” said Adams.
The national leadership team will be composed of:
Joe Adams (Chicago, IL) – Managing partner and CEO
Mike Kirley (Chicago, IL) – Chief operating officer
Jim Morton (Elkhart, IN) – Assurance national leader
Jeff Johannesen (Des Moines, IA) – Tax national leader
Gary Sturisky (Atlanta, GA) – Business consulting national leader
In addition to the national leadership team, five regional leaders will oversee the firm’s local markets:
Bill Gorman – Southeast (Washington, DC; Florida; Georgia; Maryland; North Carolina and Virginia)
Tom Ferreira – Northeast (Massachusetts; New Jersey; New York; Connecticut and Pennsylvania)
David Shane – Great Lakes (Illinois; Indiana; Ohio and Eastern Wisconsin)
Kevin Prien – Central (Colorado; Iowa; Minnesota; Missouri; Nebraska; South Dakota; Texas and Western Wisconsin)
Don Natenstedt – West (Arizona; California; Nevada and Washington)
“McGladrey’s deep technical and industry sector knowledge is spread throughout the firm’s regions, so clients can receive the insights they need when and where they need them,” said Mike Kirley, chief operating officer for McGladrey. “Bill, Tom, David, Kevin and Don will lead regional teams to provide clients with a strong ‘local touch,’ while also taking advantage of our firm’s national and international reach.”
About McGladrey
McGladrey & Pullen, LLP operates under the McGladrey brand as the fifth largest U.S. provider of assurance, tax and consulting services, with nearly 6,500 professionals and associates in more than 70 offices nationwide. McGladrey & Pullen is a licensed CPA firm, and is a member of RSM International, the sixth largest global network of independent accounting, tax and consulting firms. For more information, visit www.mcgladrey.com, join our Facebook fan page at McGladrey News, follow us on Twitter @McGladrey and/or connect with us on LinkedIn
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Press Release – South Florida based SEC registered Investment Advisor specializing in quantitative investment management, Financial Trust Asset Management, has launched a new website.
Financial Trust’s Family of 13 investment strategies have won a combined 70 “Top Gun” awards from Informa Investment Solutions, a national investment manager data base. In order win the “Top Gun”award a firm must place among the top 10 managers nationwide based on gross returns for a specific style and time period. Financial Trust’s Asia Value Momentum strategy was also ranked as the # 1 investment strategy among all investment styles in the 3rd quarter of 2010 by Baron’s Magazine.
Created by HedgeCo Websites, the site uncovers the group’s strategies including proprietary indexes, enhanced indexes and active combined strategies. Arno O. Mayer, is the CFA, CFP, Founder and President of Financial Trust Asset Management. He has been providing investment advisory services since 1985. Mayer founded Financial Trust Asset Management in 1989.
The team includes, C. William Ferris as Vice President, Peter Zaharko, Jr., as Business Development Officer and Lliana A. Ramirez as the Operations Manager.
New York- (HedgeCo.net) – The HedgeCo.net Hedge Fund Aggregate Index showed an average annual return of -2.69% through September 2011, compared to the S&P500 which showed an average of 0.85%.
While equities markets improved in September, the sovereign debt problems remained a key stressor and volatility continued to be high.
Global exposure to the situation in Europe has continued to weigh on market participants.
“Professional investors and traders are finding it difficult to navigate these choppy markets,” Evan Rapoport, CEO of HedgeCo Networks, LLC., said. ”It’s almost impossible to model out and trade successfully as markets are hanging on the words of politicians globally, rather than actual economic data.”
“As we approach the holiday season, markets should stabilize, but we have definitely seen that the economic climate can and does shift from hour to hour. Overall, the hedge fund space comprises strategies that struggle during volatile times or thrive during market volatility.” Rapoport concluded.
Some of the key findings include:
The HCN Aggressive Growth Index showed monthly gains of 1.40 in September and +8.95 YTD.
With 8.58% the HCN Long Only Index ranked the second highest with YTD return of 1.16%.
The HCN Multi-Strategy Index was down -3.44% in September.
The HCN Long Only index scored the lowest, with -8.40% in September 2011.
The HCN Emerging Markets Index ranked the second lowest at -7.23% in September.
About The HedgeCo™ Hedge Fund Index
The HedgeCo.Net (HCN) Hedge Fund Indices are a group of equally weighted performance indices utilized by numerous hedge fund managers as a benchmark for their own hedge funds. Unlike asset-weighting utilized by some other indices, the equal-weighting of the HCN presents a more general picture of performance of the hedge fund industry. By weighting all funds equally, this helps to reduce any bias toward the larger funds potentially created by alternative weightings, especially for strategies that encompass a small number of funds.
Funds included in the HCN Monthly Indices must:
Report monthly returns
Report Returns Net of All Fees
Report assets in USD
Indices Notes:
All HCN Indices are equally weighted (not based on AUM size).
“Bad Assets” (ie. Funds which do not report their AUM) are not included in the HCN.
The HCN Indices are made “official” on the fifteenth of the month.
Both domestic and offshore funds are included in the HCN Indices.
Boston – Currensee (www.currensee.com), the leader in bringing the world currency markets to investors and financial institutions across the globe, today launched the availability of its Trade Leaders™ Investment Program for institutional clients and their investors. The company also announced that HedgeCo Securities LLC, a subsidiary of HedgeCo Networks, the extensive network of hedge funds and accredited investors, will be introducing the Currensee Trade Leaders Investment Program to its growing network of institutional investors. For financial institutions seeking to expand portfolio offerings, the Trade Leaders Investment Program provides a turnkey foreign exchange (Forex) investment service. The new service enables hedge funds, money managers, family offices and other asset gatherers to tap into the $4 trillion daily Forex market by leveraging the elite Currensee network of Trade Leaders.
Financial institutions also have the benefit of managing risk on each client portfolio by using the new Currensee Risk Management Control Center™, which provides professional-level tools to help manage risk and exposure. Using the Risk Management Control Center, money managers can specify maximum drawdown and set leverage requirements for each Trade Leader, providing an effective way to protect their clients’ investments while maximizing allocated capital.
“The volatility of the stock market is creating new opportunities for managers to look outside of equities and fixed income for an uncorrelated asset class that provides the ability to diversify,” said Evan Rapoport, CEO of HedgeCo Securities. “We’re excited to work with Currensee and the quality of its Currensee Trade Leaders network, the transparency of the program and its state-of-the-art risk management tools that make the program a viable investment service to offer our network.”
Through the program, accredited investors in the extensive HedgeCo Securities network that are introduced to Currensee will have transparent, online access to the Currensee Trade Leaders network, an elite group of Forex traders recruited by Currensee through a rigorous due-diligence process. Via the Trade Leaders program, institutional money managers have direct access and control of asset allocation. They can easily create diversified Forex portfolios by selecting individual Trade Leaders based on track record, trading strategy and risk management practices. Once the manager creates a portfolio and allocates funds to Trade Leaders, the Currensee trade replication technology enables an investor in New York to receive the same trades as a Trade Leader in China, resulting in unprecedented diversification and asset allocation.
“HedgeCo’s decision to introduce its impressive qualified network to Currensee will give institutional investors the ability to invest in the foreign exchange market through the Currensee Trade Leaders. It reflects the growing appeal of the world currency markets as a viable alternative asset class and the unique ability of our investment offering to provide financial institutions with access to this market,” said Currensee CEO Dave Lemont. “The track record of the Currensee Trade Leaders is second to none, with cumulative performance results regularly outperforming the stock market, gold and other asset classes and risk management practices and controls provides an innovative balance of returns and risk control.”
For more information about the Currensee Trade Leaders investment service for institutions, please visit www.currensee.com/biz.
About Currensee
Currensee is the leader in bringing the world currency markets to investors and financial institutions around the world as a viable alternative asset class. The Currensee Trade Leaders™ Investment Program delivers the uncorrelated performance of Currensee Trade Leaders, an elite network of emerging foreign exchange managers recruited by Currensee through a rigorous due diligence process. By leveraging the Currensee advanced trade replication technology, an investor in New York automatically receives the trades of a Trade Leader based in China, resulting in a diversified portfolio of managers. As compared to other investment programs, Currensee provides unprecedented transparency and control of asset allocation and risk management, all delivered via a unique online experience that fundamentally changes the world of investing. Currensee is funded by North Bridge Venture Partners, Egan-Managed Capital and Vernon & Park Capital. Currensee is registered with the Commodity Futures Trading Commission (CFTC) as an Introducing Broker (IB) and is a member of the National Futures Association (NFA) member number 0403251. Currensee is also authorized by the Financial Services Authority (FSA), firm reference number 518648, and registered in England and Wales, companies’ house number 07025997. For more information, visit Currensee at www.currensee.com.
West Palm Beach (HedgeCo.net) – An editorial by Evan Rapoport, Co-Founder of HedgeCo Networks.
Currently, and over the past nine years, I have been selling Prime Brokerage for almost all the major Mini-Primes and some of the largest Prime Brokerage houses. I did not however work for these firms directly, nor did I ‘sell’ in the traditional sense. My role instead is one a consultant. I make introductions to what I believe is the right Prime Broker based upon the client’s needs, even if I have no economic benefit in doing so. In addition, I am most often able to actually lower commission cost of the client and get the value-added services that enhance their Prime Brokerage relationship to a level they have not experienced previously. That said, I have made hundreds of introductions to Primes and Mini-Primes and have brought in over a billion dollars of assets that have been held custody and traded with Prime Brokers.
As a result of my experience as a prime brokerage consultant, I have become quite good at understanding the strengths and weaknesses of the various Prime Brokers, especially the mini-Prime Brokers in the industry. Some can have great prices, others great software or research, better execution platforms, robust reporting, fixed connectivity, faster co-location, soft dollar administration, capital introduction, stock loan, bond desks, international equity offerings, better financing costs, enhanced leverage, futures, currencies, the list goes on and on and on. Point is, choosing a Prime Broker can be much more difficult than just figuring out who can give you the lowest commission rate. A wrong move could cost you more than thousands or millions in commissions, it could inhibit you from growing your fund and firm to the appropriate levels.
However, with all the above in mind, there is a large percentage of hedge funds that are long/short equity or options strategies that simply use a screen to execute their transactions. These funds may not utilize any of the afore mentioned services or even care about them, outside of having a good order management system (OMS) and a safe, high quality custodian for their fund assets. These types of traders can be the most commission sensitive, and turn over their portfolio the most often. For these traders, every fraction of a penny matters. So if the service was the same, and the custodian was the same, and the platform was the same, why would a hedge fund pay .01c if they could pay . 005 or .003? The reason are plentiful, frankly, and include:
Inability to negotiate properly with their Prime or executing broker because of their lack of industry knowledge (ie: where the industry is priced currently for their size, volume, etc.)
Insecurity about upsetting the relationship with their current Prime or executing broker.
Feeling they may lose potential value added service they currently enjoy
Laziness
There is no reason a fund has to be overpaying for a service that has been commoditized like screen-based trading, and I spend a good deal of my day re-working potential clients Prime Brokerage or straight execution arrangements in efforts to save them and their investors as much as possible. This is especially easy when you are moving a client from one brokerage firm that uses XYZ for custody, to another brokerage firm that also has a clearing relationship with XYZ. They both have the same OMS, same reporting, etc.; usually the only difference is usually cost. What continues to surprise me is how even some of the largest hedge funds still don’t pay as low of a price as they could be paying. Their posture possibly attributed to what was mentioned in the bullets above.
So all of this got me thinking, “What if there was a place where fund managers and traders could go to simply name the price they wanted to pay, detail the services needed, and see if there were any takers?” In a tough economy where brokerage firms are fighting for execution business, and fund managers have been put in the driver’s seat, they need to be able to seize the opportunity. But what vehicle? And how would they drive it? That is why I, and my team, came up with ThePrimeline.com.
Shameless pitch below:
ThePrimeline.com is the first service available to the hedge fund and trading community where customers can name the price they would like to pay for execution. ThePrimeLine.com utilizes a multi-factor comparison algorithm to find the perfect match between prime brokers and investment Managers. By working with the information submitted by the investment manager, coupled with internal data and research, the HedgeCo Securities team suggests a list of prime brokers relevant to the hedge fund or manager.
Utilizing ThePrimeline.com may allow hedge funds and traders to anonymously shop their prime brokerage and execution needs and ultimately bring down their pricing without any sacrifice in quality. That was my goal in creating this site. I truly hope if your firm is one that can benefit from the site, that you take advantage of the opportunity to potentially decrease your costs and improve your returns.
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New York (HedegCo.net) – The end of a cold winter is upon us, and it’s time to celebrate the winter thaw! The HedgeCo Spring Networking Event is a chance for investors, hedge fund managers, and other industry professionals to come together and enjoy a night of sharing ideas and meeting new contacts.
Recognized as having the largest attendance for any type of event in the hedge fund industry, the HedgeCo Networking Events have quickly become the top destination for generating new business and meeting new industry contacts.
Come celebrate the end of winter, contribute to Hedge Funds Care, eat, drink and network with other members of the alternative investments community.
Join us in New York at the ultra-modern Aspen Social Club. It’s a party that shouldn’t be missed!
Press Release – December 1-3, 2010: marcus evans Summits, is pleased to announce Francisco Adranges as the Keynote Speaker at the Latin Investments Summit, taking place at the prestigious Red Rock Casino Resort & Spa, Las Vegas, NV.
The Latin Investments Summit (www.latininvestmentsummit.com), provides a unique forum for service providers to gain access to leading investors in Latin America. Over three days, service providers will meet and interact with senior executives responsible for investment strategy, asset allocation, and manager selection through a number of one-on-one business meetings and many networking activities.
Francisco Adranges, one of the world’s most reputable Chief Investment Officers will be presenting on real-estate investing in Latin America. Also adding to this year’s cutting edge program, we have some of investment’s leading minds speaking on relevant topics such as alternative investments in Latin America, Brazilian fund industry, and Columbia’s fixed income market amongst other key issues.
This year’s Latin Investments Summit audience includes Chief Investment Officers; Vice Presidents; Directors and Heads of Pensions and Family Offices as well as Sponsors offering services, strategies, and information to senior investment executives within the Latin Investments market.
marcus evans Summits (www.marcusevans.com), produces high level business platforms for the world’s leading decision-makers. These dynamic and innovative forums initiate and develop business relationships one to one between director and C level practitioners from the world’s most influential organisations and with leading product and service suppliers. marcus evans Summit’s guarantees an exclusive format which enables participants to achieve the maximum amount of business and knowledge interaction over a three day event in a stimulating environment.
Please note that the Latin Investments Summit is a closed business event and the number of participants are limited.
Press Release – November 4-6, 2010: marcus evans Summits, is pleased to announce Daniel J. Mitchell as the Keynote Speaker at the Tax Officers Summit, taking place at the prestigious Red Rock Casino Resort and Spa in Las Vegas, NV.
The Tax Officers Summit (www.taxofficerssummit.com), provides a unique forum for service providers to gain access to leading tax executives throughout North America. Over three days, solution providers will meet and interact with senior tax executives through a number of one-on-one business meetings and many networking activities.
Daniel J. Mitchell, one of the world’s leaders in fiscal policy, will be presenting on “Fiscal Policy Challenges for the Business Community.” Also adding to this year’s cutting edge program, we have some of Tax’s leading minds speaking on relevant topics such as the current role of tax executives, tax credit investments, effective retention of talented tax professionals and affordable international tax reform amongst other key issues. Keynote Speakers also include the Honorable Dick Cheney, 46th President of the United States and Edward D. Kleinbard, Professor of Law.
This year’s Tax Officers Summit audience includes Chief Tax Officers, VP’s of Tax, and Directors of Tax as well as Sponsors offering services, technology and information to tax senior executives within market.
marcus evans Summits (www.marcusevans.com), produces high level business platforms for the world’s leading decision-makers. These dynamic and innovative forums initiate and develop business relationships one to one between director and C level practitioners from the world’s most influential organisations and with leading product and service suppliers. marcus evans Summit’s guarantees an exclusive format which enables participants to achieve the maximum amount of business and knowledge interaction over a three day event in a stimulating environment.
Please note that the Tax Officers Summit is a closed business event and the number of participants are limited.
Family offices might need to change their structure altogether as all of the new regulations for the private wealth management industry come into force, says Lee Unterman, Managing Partner at Kurzman Karelsen & Frank, LLP. A service provider company at the marcus evans Private Wealth Management Summit Fall 2010 in Las Vegas, Nevada, December 1-3, Unterman shares strategies for how family offices can prepare for the changes ahead.
What do you see as the main challenges for family offices in the near future?
Lee Unterman: Family offices face the business challenges of an uncertain economy and trying to deliver steady and stable returns. They also face challenges as increased regulation and increased operating costs drive them towards consolidation or a change in their corporate structure. Some single family offices either have or will become multi-family offices or will change their structure altogether when the latest regulatory changes come into effect.
Over the next 12 months, family offices will also face a number of legal questions due to the changing state of family office regulation and the Dodd-Frank financial reform bill including compliance, due diligence, the possibility of having to register, and the increased liability risks, all of which will add costs.
How can family offices prepare for the Dodd-Frank Wall Street Reform Act?
Lee Unterman: There is no best way to prepare for this as the US Securities and Exchange Commission (SEC) has not yet finally defined the family office exemption, although a proposed rule has just been published for comment.
Nonetheless, it would be prudent to consider a number of different competing factors. Most family offices want to keep their finances, intra-family and generational issues private. They need to consider the prospective ramifications of registering or changing their corporate structure. How will it impact their privacy and what are the costs involved? Should they use or form venture capital funds to take advantage of the venture capital fund advisor exemption? Would they fit into the private fund advisor exemption? Should they try to form a private trust company, subject to various state banking regulations and examinations?
Until the SEC clarifies the definition of the family office exemption, they need to consider the different options and discuss the pitfalls of registering and the structures that can be used to avoid registration, if that is what the family wants. If they have no concern about registering, I might also advise them to consider switching to a multi-family office model to spread their administrative and operating costs while keeping their eye out for due diligence issues even if they have third-party investment advisors managing their money.
What long-term strategies would you recommend?
Lee Unterman: Family office managers and directors should be guided by such words as due diligence and transparency. If they anticipate a requirement to register in the future, they should conduct their business in a transparent way now. Complying with laws is not hard. It is about understanding the rules and working with experts to accomplish business goals within the confines of those rules.
Author: Sarin Kouyoumdjian-Gurunlian, Press Manager, marcus evans, Summits Division
About the Private Wealth Management Summit Fall 2010
This unique forum will take place at the Red Rock Casino Resort & Spa, Las Vegas, Nevada, December 1-3, 2010. Offering much more than any conference, exhibition or trade show, this exclusive meeting will bring together esteemed industry thought leaders and solution providers to a highly focused and interactive networking event. The summit includes presentations on the new dynamics in federal tax policy, innovative asset allocation strategies, cutting edge techniques to evaluate and manage risks, and tips for educating the next generation in wealth management.
Please note that the summit is a closed business event and the number of participants strictly limited.
About marcus evans Summits
marcus evans Summits are high level business forums for the world’s leading decision-makers to meet, learn and discuss strategies and solutions. Held at exclusive locations around the world, these events provide attendees with a unique opportunity to individually tailor their schedules of keynote presentations, think tanks, seminars and one-on-one business meetings.
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About Kurzman Karelsen & Frank, LLP
KURZMAN KARELSEN & FRANK is a full service law firm which traces its roots back to the Civil War. The Firm engages in a variety of corporate, securities, litigation and real estate matters, including: mergers and acquisitions; private placements; regulatory filings; corporate governance and compliance issues, with a special emphasis on the financial industry and compliance with SEC and FINRA rules.
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