KH Directors has launched a new service to introduce experienced independent directors to offshore hedge funds.
The directors available are qualified lawyers and accountants currently on the boards of funds domiciled in the Cayman Islands and in the British Virgin Islands (BVI). KH Directors will introduce the independent directors to investment managers, hedge fund administrators, fund lawyers and other service providers to meet the increasing demand by hedge funds for experienced independent directors.
‘If a hedge fund director is not independent, there is a danger that his fiduciary duties to the fund may conflict with his duties to his employer who has provided him to act as a director,’ says Mark Shadwick of KH Directors. ‘Investors in the fund may suffer as a result. We have noticed a positive trend that most major fund administrators who calculate the value of the fund’s investments, no longer provide personal directors to hedge funds.
Independent hedge fund directors offer increased corporate governance to offshore hedge funds at the time when the SEC has started to regulate most US investment managers.
‘We are not employees of fund administrators or trust companies owned by offshore law firms providing legal advice,’ says Gordon Casey of KH Directors. ‘We are truly independent and we have no conflicts of interest with the other service providers to the funds.’
By 1 February 2006 most US based investment managers had to register with the SEC. However the SEC does not directly regulate the offshore funds they manage. Many offshore hedge funds are Cayman or BVI domiciled investment funds registered offshore. Increased corporate governance with independent directors at the fund level provides integrity to the fund’s structure and reduces the risks of mismanagement. Independent directors are also required for hedge funds listing on the Irish Stock Exchange.
Background notes: KH Directors is a division of Knight Hedge Ltd. The company was established in 2004 by Gordon Casey an attorney. Gordon was formerly In-House Legal Counsel to Citco, Curacao, Netherlands Antilles. Citco are the world’s largest offshore fund administrator. Gordon is joined by Mark Shadwick LLB, LLM, Barrister (England & Wales) who and is an experienced board director of Cayman and BVI domiciled hedge funds and has five years experience with a fund administrator in Grand Cayman.
