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New York (HedgeCo.net) – Highlights of a second annual national survey released by Morningstar and Barron’s Magazine examining the perception and usage of alternative investments among institutions and financial advisors showed that hedge funds were the most popular alternative vehicles over the last five years, and institutions and advisors expect to continue to increase allocations to hedge funds over the next five years.
“One of the most interesting findings from our survey is that both institutions and advisors continue to view alternative investments optimistically, despite their questionable performance, correlation, and liquidity during last year’s global downturn as well as the high-profile scandals that rocked the hedge fund industry,” said Steve Deutsch, director of the pension, endowment, and foundation database at Morningstar. “Again this year, the majority of participants indicate that they plan to increase allocations to alternatives, but with greater scrutiny and due diligence given to those investments.”
Among the survey findings:
Current and Future Usage of Alternatives
• More than 60% of institutions and advisors believe that alternatives will be as important or more important than traditional investments over the next five years.
• The majority of institutions and advisors expect alternatives to account for more 10% of their portfolios over the next five years; a quarter of institutions expect alternatives to account for more than 25% of their portfolios.
• Hedge funds were the most popular alternative vehicles over the last five years, and institutions and advisors expect to continue to increase allocations to hedge funds over the next five years.
Motivation and Hesitation
• For both institutions and advisors, the top three reasons for investing in alternatives remain the same as in last year’s survey: portfolio diversification, absolute returns, and exposure to different investment techniques, like arbitrage or shorting.
• Institutions and advisors are much more concerned, however, about lack of liquidity and transparency than they were last year.
Definitions of “alternative”
• Compared to the 2008 survey, fewer institutions and advisors view real estate investment trusts and commodities as alternative asset classes.
• Both institutions and advisors tend to classify investments as “alternative” based on the investment’s strategy, i.e. absolute return, rather than the investment’s designation, i.e. mutual fund versus hedge fund.
“Perhaps most important for investment consultants, advisors, and money management firms to note is the survey once again found that overall both institutions and advisors want the benefits of alternative strategies with the positive characteristics of traditional investments—low correlation with liquidity, absolute returns with transparency, and redemptions without restrictions,” Deutsch added.
Morningstar and Barron’s conducted the Web-based survey in late September through early October 2009; 89 institutions and 300 financial advisors participated. Survey results appear in the Nov. 9 issue of Barron’s and online at Barrons.com.
New York (HedgeCo.net) – The GlobeOp seminar drew a capacity audience of hedge fund investors and managers, representing approximately $260 billion in assets under management, in New York City over the weekend.
Speakers representing Lighthouse Investment Partners, Lyxor Asset Management, Waterstone Capital Management, Bracewell & Giuliani, Newedge Group and GlobeOp offered insights on hedge fund manager selection, legal requirements, middle-back office services, controls and monitoring.
Excepts from the presentations include:
Sean McGould, president and co-chief investment officer, Lighthouse Partners “We transitioned to managed accounts over the last five years for the added benefits of transparency, flexibility, and control. Full transparency allows for a deeper focus than has traditionally been the case, especially during the manager selection process. For prospective managers, there are three primary considerations. First, does the manager offer real diversification or do they merely compound existing risks? This can only be accurately measured by layering a prospect’s daily position level data into the portfolio and conducting a deep statistical analysis. Second, is the portfolio highly correlated to the most widely held names or other dominant themes within the hedge fund universe? Having the ability to confirm the uniqueness of a prospect’s portfolio is of great benefit and increases the level of overall diversification. Finally, if the manager meets these tests, is there a willingness to commit the resources necessary to make a managed account feasible and the on-boarding process as seamless as possible? …Flexibility is key to remaining opportunistic and taking advantage of market dislocations. …The benefit of control speaks for itself after a year like 2008.
Nathanael Benzaken, managing director, Lyxor Asset Management “The two main risks for investors are market risk and operations risk – one to manage and the other to mitigate… The challenge with transparency is how to exploit it. To understand risk, investors need robust software, experienced risk managers, and an appropriate risk methodology. Only scenario and stress test models can help assess tail risk in dislocated markets. VaR is not appropriate, unless perhaps for manager-level portfolio construction… The managed account’s segregation facilitates operational risk management. This is the most important risk to eliminate because it creates a short put equivalent position for investors – it’s the ‘dark side’…. All managed accounts and platforms are not equal. Some are ‘Madoff-able;’ some are ‘Amaranth-able.’ For full transparency and to identify risk and/or style drift early, in-depth and regular due diligence should be done on the underlying managers, the platform structure and infrastructure – at inception and throughout the life of the relationships.
Risk monitoring is nothing, what really matters is risk management. The goal is not to second- guess or intervene in portfolio management, but to understand and take clear action when it’s necessary – for instance in the case of mitigating counterparty risk or when confidence in the manager is lost (e.g. breach of mandate).”
Martin Kalish, chief operating officer, chief financial officer, Waterstone Capital Management “Managed accounts are not for everyone – does it fit your business plan? The manager seeks a long-term investor; the investor requires assurance of the manager’s experience in running a managed account. Consider whether the investor will understand and be responsible for the portfolio information they receive — is more support time needed than for other fund investors? …The mandate is also key – its definitions can significantly impact asset allocation, concentrations, leverage, liquidity, operations and risk management compared to the flagship fund.
Cost and resources also matter. Managed accounts are about data management. Operational systems are needed to create reporting transparency. Is there sufficient operational staff for trade allocation, valuation and settlement, portfolio accounting and programming? …It’s very difficult to run multiple funds without investing in technology. Trade allocations should be automated to mitigate manual intervention. … Investors also need resources to execute managed accounts – it requires two-three months, including the key challenges of the legal aspects and establishing prime broker accounts.”
John Brunjes, partner, Bracewell & Giuliani “The structure and terms an investor prefers in the managed account involve a fully-negotiated process. For the investment advisor, a managed account is a separate client under the Investment Advisors act. At the level of 15 clients, the advisor must become SEC-registered and operate in a registered environment – a new challenge for some. For the investor, the arrangement gives power of attorney to the manager to trade the account, subject to restrictions the investor defines. It is a fee-for-service arrangement as opposed to the two-and-twenty structure traditional in pooled capital. Many investors, in consultation with their managers, create a special purpose vehicle, usually a limited liability company. To avoid project execution risk, investors should ensure the manager has already strategically decided to undertake managed account arrangements and is prepared for what it entails.
The mandate or operating agreement defines the type of trading authorisations and restrictions governing the manager, including sector, concentrations or company specifics. As the direct owner of the securities, the investor also assumes liability and compliance responsibilities.
Investors increasingly specify independent administrators to provide checks and balances on managers, including asset and portfolio valuation, daily position and risk reporting, etc. The registered environment also stipulates administrative, infrastructure and reporting requirements. Independent involvement in providing transparency, checks and balances to various managed account components can offer more comfort to investors, which is why these vehicles are increasingly attractive.”
Cary Goldstein, associate director, Newedge USA, Prime Brokerage Group “A managed account platform will have more than one hedge fund manager trading for multiple vehicles, multiple prime broker relationships and a single administrator across all accounts. From a trading perspective, the most significant implication for each fund manager is the need for a trade allocation process to split trades appropriately between the managed accounts and the flagship fund. For liquid, listed instruments, this is fairly straight-forward. But it can be more complex for OTC and illiquid instruments – distinct trades may be needed for each managed account and flagship fund, with good monitoring to mitigate tracking errors… In a managed account, investors view the ability to control of the amount of leverage utilised to be an advantage.”
Vernon Barback, president, chief operating officer, GlobeOp Financial Services “Administration for managed accounts should focus on what the investor wants and needs. Best practice requires a very deep level of service. Helping the investor manage and mitigate risk across all portfolios is key; reducing overall operational risk is the greatest value-add. The investor should approach the administrator in a demanding and thoughtful manner, as a partner who helps to mitigate operational risks and provide transparency so the investor can ensure that the manager is adhering to the agreed investment principles.
Due diligence is not a “tick the box” exercise. Rather, it needs to be an ongoing and in-depth process. There are seven administration areas where an investor should conduct deep due diligence. Is technology a source of innovation and target of continuous investment? Are processes subject to a control environment and is real-time transparency accessible to investors and administrator management? Is domain experience and scale being developed in the human resource pool? Visit off-shore teams and operations to ensure they are integral and adding value to operations. Ask for a personal presentation of the SAS 70 to ensure it is a single document whose scope covers all services & controls the managed account requires, in all offices. Reconciliations should be run daily, with breaks corrected with the manager, and root causes should be investigated to prevent repetition. As the devil is in the detail of the security master, verify that customized risk reports can be run by the administration organization keeping the managed account’s books & records.”
Alex Akesson
Editing for HedgeCo.net alex@hedgeco.net HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
News Inferno – One hedge fund has agreed to reimburse its investors who were swindled in the historic Ponzi scheme orchestrated by the disgraced, now jailed, financier, Bernard Madoff. The hedge fund—Fairfield Greenwich Advisors—apparently moved money to Madoff, said Boston.com, and will now reimburse its Massachusetts investors for some $8 million to cover losses. The agreement was reached Wednesday with Secretary of State William F. Galvin, said Boston.com,
Galvin, said Fairfield Greenwich, did not conduct the “rigorous” due diligence of Madoff it told its investors in Massachusetts it had, reported Boston.com. Galvin hopes that this agreement “will become a template for other resolutions’’ in the massive Ponzi scandal, quoted Boston.com.
Pensions and Investments – Fairfield Greenwich agreed to pay about $8 million to settle charges leveled at the hedge fund-of-funds manager by William F. Galvin, Massachusetts secretary of the commonwealth, in connection with the Madoff Ponzi scheme.
In settling, Fairfield Greenwich neither admitted nor denied the charges made in the Massachusetts’ Securities Division’s administrative complaint, which was filed April 1. Those charges alleged that the company failed to conduct due diligence on Bernard L. Madoff Investment Securities and later misrepresented its due diligence practices to investors in its hedge funds of funds, according to documents on Mr. Galvin’s website. As part of the settlement agreement, Mr. Galvin’s office dropped fraud charges that were included in the original complaint.
West Palm Beach (HedgeCo.net) – Hedge fund operational due diligence provider, Castle Hall Alternatives, published its latest White Paper, ‘From Manhattan to Madoff: the Causes and Lessons of Hedge Fund Operational Failure.’
The Paper’s analysis and findings are based on HedgeEvent, a comprehensive, web-based database of more than 300 operational events, now available to Castle Hall’s due diligence clients. HedgeEvent supplements HedgeDiligence, the firm’s existing client web portal.
Chris Addy, Castle Hall’s CEO, said “the colossal fraud perpetrated by Bernie Madoff, together with a number of other recent cases, has made investors acutely concerned by the risk of operational ‘blow ups’. However, there has been little systematic study of operational failure, meaning that investors have limited guidance as to the extent of this problem.”
“The creation of HedgeEvent, which has taken more than two years to compile, has enabled us to summarize key metrics related to hedge fund operational failure” said Addy. “From Manhattan to Madoff analyzes operational events by number, estimated loss, causal factor and by the strategy of the funds involved.”
HedgeEvent contains 327 cases of hedge fund operational failure through June 30, 2009. Madoff, with an estimated financial impact of $64 billion, is by far the largest; the remaining cases have an aggregate estimated financial impact of approximately $15 billion. Of the 327 operational events, 121 have an estimated impact of $10 million or more, and 31 of at least $100 million.
“While operational failures are material – Madoff spectacularly so – it does not seem that fraud is pervasive in the hedge fund industry” said Addy. “Investors should, however, be very focused on the lessons which can be learned from those hedge funds which did generate large losses. Many of these were well established firms which attracted capital from reputable investors.”
Across all Events, the most common causes of operational failure are theft and misappropriation followed by existence of assets (the manager claimed to own fake securities or operated a Ponzi scheme where reported assets did not exist). The most common strategies subject to operational failure are long / short equity followed by managed futures. It is notable that investors have traditionally viewed these strategies, holding largely exchange-traded securities, as straightforward with low operational risk.
West Palm Beach (HedgeCo.net) – The Hedge Fund Journal’s Funds of Hedge Funds GLOBAL50, produced in association with Newedge Prime Brokerage Group, reports that minus a few exceptions, funds were happy to participate in the survey and submitted their assets under management figures as at 30th June 2009, which goes some way to prove that funds are taking the issue of transparency more seriously. Those funds that declined to participate have been given estimates based on a variety of data and industry sources.
In responding to the survey, many funds wanted to emphasise that liquidity terms were often the key to how a firm had been able to retain assets, the Journal reports. Those funds with more generous liquidity terms believed, rightly, that they were victims of what is now aptly-called the ‘ATM effect’.
The data shows that between 30th September 2008 and 30th June 2009, over $200 billion was withdrawn from the top 50 funds. Most funds lost an average of between 25% – 30% of their assets under management. However, UBS Alternative and Quantitative Investments remains in pole position, despite losing over 33% of its assets: at 30th June, 2009 assets under management stood at $31.4 billion (down from $46.6 billion in September 2008).
The top 50 funds are certainly managing less, but they are not out of the game. Smaller funds, of course, are facing an even tougher time. Chicago-based Hedge Fund Research (HFR) has reported that over 200 funds of hedge funds liquidated in 2009. This is a significant increase on the last quarter and represents an annual attrition rate of over 8%; nearly double the previous record set in Q4 2008. Falling assets and rising costs due to heightened due diligence and compliance demands from investors will continue to have a strong impact on the business viability of smaller funds.
Hitting rock bottom
The crisis has raised some important questions. Having grown at more than 20% a year between 2000 and 2008, the reversal in fortunes has come as a shock to many within the industry. At their peak, assets under management for funds of hedge funds reached $825 billion according to HFR, but by the end of Q2 2009, assets in the sector had dropped to $530 billion. Importantly, that marked a $5 billion gain from 31st March 2009 and may indicate that redemptions have bottomed out.
But is the fund of hedge funds industry a victim of circumstance or is it a flawed business model? The connection between the Madoff scandal and the industry was unfortunate, if not unfair, (although, some notable funds of hedge funds had invested with Madoff) and as investors sought to retrieve money where possible, it was inevitable that funds of hedge funds would be called upon. “What we have seen is the latest phase of an evolutionary process,” says Permal’s Roberto Giuffrida, Senior Vice President, Regional Director Europe. “Since hedge funds first emerged 60 years ago, there have been three waves of growth and decline, and we are fully expecting to see the fourth wave of growth over the next few years.”
But without doubt there are weaknesses within the model. One major area of weakness is the asset liability mismatch. Funds of hedge funds have traditionally managed their portfolios with a mismatch between portfolio liquidity and terms offered to investors. In the event of a sudden rush of redemptions, funds had a credit facility to bridge the two. In reality, this system proved to be wholly unreliable. Funds were unable to meet the redemption requests and were forced to impose gates.
Adapt or die
Issues such as alignment between investors and managers in terms of fees and investment objectives as well as transparency and the due diligence process are also areas where practices are being reviewed and changed. In the current environment investors are able to affect changes and do not have to settle for second best.
But despite the recriminations, in relative terms, hedge fund investment held up well during the crisis. For example, in 2008 the Hennessee Hedge Fund Index and the Barclay Hedge Index fell 22.42% and 21.63% respectively, while the S&P 500 slid 38.49% and the NASDAQ plunged 40.54%. “The fact that hedge fund indices outperformed the long only indices proves that hedge funds offer the downside protection. And in 2009 we are seeing investor allocations into hedge funds and funds of hedge funds,” explains Optima Managing Director, Graham Martin.
Data clearly shows the rate of redemptions is slowing. They were lower during Q1 2009 than in Q4 2008 according to Standard and Poor’s and they were lower still in the second quarter of 2009. HFR notes that in the last year, funds of hedge funds have dropped fees by three basis points to 1.25%. There is also evidence which suggests that funds with lower management fees outperformed the funds with higher fees, although the data on this is fragmentary. What’s more, liquidity profiles are improving: funds have reduced leverage and many are showing positive cash balances.
Could this be the nadir for the industry? HFR, BNY Mellon and Casey Quirk believe so. Many managers and not a few studies are projecting that assets will grow further in the second half of this year. And regardless of the industry setbacks, funds of funds will continue to be a major channel into single manager hedge funds. But Craig Stevenson, Senior Investment Consultant, Watson Wyatt believes that while funds of hedge funds will stage a comeback, they will face increased competition from single manager funds. He attributes this to the fact that before the crisis, funds of funds could offer capacity to those funds that were closed. The current state of the industry means that single managers are looking to build their own portfolio of institutional assets and virtually all funds, even the most successful, are now open.
Clearly, investors who have less resources and alternative asset experience will continue to invest through funds of hedge funds. “Allocating to hedge funds is a good way of diversifying portfolios and with funds of funds on a base fee for the foreseeable future they are as cheap as they have ever been,” says Stevenson. The business model may indeed be more sound than was thought six months ago since with time investors will return. But some funds that stretched the goodwill of investors may find it is difficult to be fully forgiven.
You can access the Global 50 by clicking on the link below:
Reuters – The UK Railways Pension Schemes, one of the UK’s largest plans, has invested 65 million pounds in London-based asset manager Goodhart Partners’ global long-short equity fund of hedge funds.
Railpen Investments, the fund manager of the industry-wide scheme with assets of over 15 billion pounds, has some 8 percent of its assets in hedge fund strategies.
”Goodhart’s Long-Short fund offers large institutions exposure to small and specialist hedge fund managers, with the degree of governance and due diligence these allocations require,” said Paul Jeffries, an investment analyst at Railpen.
HedgeCo.net (West Palm Beach) – Hedge fund manager Headline Capital Management LLC, is spearheading a series of capital introduction events showcasing the largest gathering of hedge fund managers from the Charlotte region. Aegis Funds Management, Afton Capital Management, Blackhawk Capital Management, Charlotte Global Advisors, Gorelick Brothers Capital, Keane Capital Management plus other hedge funds in the Charlotte region are also participating.
As the nation’s second largest banking center, Charlotte is also an attractive haven for hedge funds. Some of the nation’s most talented investment professionals relocated here to work for Bank of America and Wachovia, now a wholly-owned subsidiary and east coast headquarters for Wells Fargo. Many of these former bankers and traders stayed here to start their own hedge funds, especially after merger-related layoffs.
What is truly unique about the Charlotte Hedge Fund Forum is that in a highly competitive market, 7+ hedge fund managers from the same city have the foresight to jointly promoting a series of capital introduction events. “We’re still competitors. By working together, however, we can leverage our marketing dollars to attract more investors than we could alone,” says Mark McClanahan, the marketing director at Headline Capital Management.
The Charlotte Hedge Fund Forum provides more value than the traditional cap intro event by showcasing several hedge fund managers from the same city. The Charlotte showcase is more efficient for institutional investors with tight travel budgets who want to meet several managers at the same time. Wealthy families and high net worth individuals who are more comfortable investing in managers located closer to home, especially in this post-Madoff era, will also benefit from this Charlotte showcase. The real payoff is after the event when the investor needs to visit each hedge fund’s office for due diligence. Investors who attend the Charlotte Hedge Fund Forum will save time and money following up with several Charlotte-based managers during one trip.
The Charlotte Hedge Fund Forum is scheduled for September 23, 2009 at the historic Duke Mansion where tobacco baron James B. Duke founded The Duke Endowment. Mark Yusko, President and CIO of Morgan Creek Capital of Chapel Hill, North Carolina will deliver the Keynote Speech on “Alternative Thinking for Investments” during a complimentary luncheon. Afterwards, each hedge fund manager will deliver a formal 10-12 minute podium presentation and then meet with investors during a series of 30-minute, informal “meet the manager” roundtable discussions.
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HedgeCo.net (West Palm Beach) – A study by Dennis S. Ryan and Sonia Xavier of offshore law specialist, Conyers Dill & Pearman has come out ‘Cayman Islands Funds – Entering the Gateway to Capital Markets in India.’ The team describes the history and challenges of what Cayman Islands domiciled investment funds have faced when seeking to invest into Indian capital markets.
One of the major hurdles in this regard has been addressed by the 10 June 2009 admission of the Cayman Islands Monetary Authority (CIMA) as an ordinary (i.e., full) member of the International Organization of Securities Commissions (IOSCO), according to the report.
By way of background, the IOSCO Objectives and Principles of Securities Regulation were endorsed by its member regulators of various securities and futures markets in 1998, and generally are viewed by securities regulators as the key international benchmark on sound principles and practices for securities regulation. Currently, IOSCO members regulate the vast majority of the world’s securities markets.
To access the Indian markets, an investment fund must register as a Foreign Institutional Investor (FII) with The Securities and Exchange Board of India (SEBI). In the past, since CIMA was not a member of IOSCO, SEBI often engaged in extensive due diligence and inquiries before allowing registration of a Cayman fund as a FII. As a result, few Cayman Islands funds have registered with SEBI. CIMA’s admission to IOSCO looks set to change this trend in favour of Cayman Islands funds.
The timing could not be better, the report says, with emerging markets competing to attract liquidity, the Cayman Islands, with over 9,000 CIMA registered investment funds, a proven track record with investors and an excellent and sophisticated service infrastructure, has a great deal to offer India and investors that wish to access its markets.
One remaining challenge is that the Cayman Islands do not currently have a tax treaty with India, the law fim asid. Mauritius, on the other hand, has long been the preferred jurisdiction for investment into India as a consequence of the favourable double taxation agreement between those countries (the Mauritius-India DTAA), contributing to around 44% of foreign direct investment (FDI) into India.
Investment funds from non-tax treaty jurisdictions have developed a structure involving a wholly owned Mauritius subsidiary for purposes of Indian investment. Typically, this structure requires a Cayman Islands (or other non-treaty jurisdiction) investment fund to register with SEBI as a FII. The Mauritius subsidiary fund will then be registered with SEBI as a sub-account of the FII, permitting it to invest directly in Indian securities via SEBI.
The Mauritius fund will be set up as a Global Business Company Category 1 (GBC1) that is resident in Mauritius for tax purposes. As a Mauritius tax resident, this fund is subject to tax on income at the flat rate of 15%. However it is entitled to claim a credit for foreign tax on income not derived from Mauritius against the Mauritius tax payable, resulting in an effective tax rate generally ranging between 3% and nil. As a tax resident GBC1, the fund is also entitled to take advantage of Mauritius’ network of tax treaties, including the Mauritius-India DTAA, the report concluded.
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Bloomberg – Let’s say you hand a million dollars or more to an investment advisory firm that boasts a sterling reputation, grand results and a promise to thoroughly investigate hedge funds before recommending them.
For all the claims of super due diligence, this fine firm sinks your money into what turns out to be a Ponzi scheme.
Now your money is gone and the hedge fund founder who lost it is serving 20 more than years. Federal regulators belatedly find that your adviser didn’t actually do that much due diligence.
The Bayou Group hedge fund it put you into hadn’t had an independent audit almost since its beginning when an initial auditor noticed consistent losses and was let go, according to the Securities and Exchange Commission.
West Palm Beach (HedgeCo.net) – I recently conducted an interview with Colleen Sorrentino, CIO, and Charles M. Wright, CFA, of FoHF’s Advanced Strategies II, LP (AS II) as part of a manager interview to be featured on our HedgeCo.net Manager Database. I thought to publish some excerpts in advance.
On the topic of the FoHF’s positive 5 year track record, Wright said, "Our goal is to achieve 75 to 80% in the bull market and we have met that through the history of the fund, beating the S&P 500 about 8.54% last year. Our 5 year track record Feb 2004-2009 beat the S&P 500 by 35%."
As a multi-strategy fund with $36 million under management, a 1.50% management fee and a minimum initial investment of $250,000, AS II recently celebrated its 5 year track record this February.
"We are not afraid of volatility and our edge is in our long-short policy, we don’t use leverage as much as other funds." Sorrentino said, "AS II is a great fit for family offices, institution investors, foundations and high net worth individuals."
"Our strategy is combination of art and science," Sorrentino continued, "We put a lot of time into into our managers and their selection in order to generate maximum return. We are not a hot fund, moving from manager to manager, we do complete background checks at the start, following up with a focus on due diligence, meeting on site on an annual basis as well as with independent advisers."
AS II stays away from over-leveraged funds, with no leverage at the fund level. "We do not place money with hedge funds that invest a substantial portion of their assets in esoteric investments such as derivatives, structured investment vehicles, CDOs, or managers that utilize black box quantitative models. We have been managing funds of hedge fund portfolios since 1992. The Firm’s partners and employees maintain a substantial stake in AS II." the FoHF’s website states.
AS II’s parent company, Wall Street Access Advanced Strategies LLC (WSAAS), has been managing fund of hedge funds portfolios for over 15 years. WSAAS is also an affiliate of Wall Street Access, which is a New York Stock Exchange member. G&S Fund Services is Fund Administrator.
Alex Akesson
Editor for HedgeCo.Net Email: alex@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
West Palm Beach (HedgeCo.net) – Financial administration automation specialist, Confluence, released a new whitepaper for hedge fund administration executives, entitled "Hedge Fund Reporting: The Change Imperative".
"Mandates from investors, regulators, and auditors are driving significant change in hedge fund back offices," said Kirk Botula, Executive Vice President and Chief Operating Officer of Confluence. "Each group is demanding new levels of due diligence, transparency, and disclosure that are driving never-before-seen hedge fund reporting requirements. Technology and automation can improve processes and offer the speed, control and flexibility needed in this new reporting environment."
A recent Rothstein Kass survey showed that 98% of hedge fund managers expect increased regulation of the hedge fund industry by the new administration—adding to burdens already imposed by FAS 157, FAS 161, and International Financial Reporting Standards.
The whitepaper also provides practical advice to help ensure that reporting processes are sufficient to meet these heightened demands. It offers best-practice recommendations and includes a "Sample Checklist" to help administrators evaluate their operations, whether they rely on outside service providers or their own internal back offices.
Alex Akesson
Edtior for HedgeCo.Net Email: alex@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
