HSBC's AFS division (formerly Bank of Bermuda's Global Fund Services) is offering D&O and professional indemnity insurance to hedge funds.
The new product line, which is offered through HSBC Insurance Brokers Limited and underwritten by a highly rated panel of insurers, provides protection for the personal assets of fund managers and company reimbursements.
The facility can also offer personal indemnity (PI ) insurance for the fund, and directors and officers (D&O) and PI insurance for the fund investment advisor/manager.
Drew Douglas, Head of Product Management for HSBC's Alternative Fund Services said: "Directors, officers and investment managers are faced with some key challenges when overseeing the operation and performance of a hedge fund. Looking ahead, hedge funds are likely to be subject to more and more regulation, increased demands for transparency and greater scrutiny from both the institutional and retail investment sectors. As a result, insurance premiums for hedge funds are rising considerably.
He added: "Working closely with HSBC Insurance Brokers Limited to better understand the risks involved in providing this type of coverage and offering it exclusively to our client base, we are able to offer competitive insurance rates to our clients, which goes one step further in helping them concentrate on what they do best - managing the fund. Being part of one of the world's largest financial institutions enables us to maximise the services offered by other parts of the HSBC group to the benefit of our clients."
Background Note: Alternative Fund Services forms part of HSBC Securities Services and provides administration services for hedge funds, fund of funds, emerging market funds and private equity funds. HSBC Securities Services, a division of Global Transaction Banking in HSBC's Corporate, Investment Banking and Markets, provides comprehensive global, regional and domestic services, for independent and institutional clients, including global custody, traditional and alternative fund administration, corporate trust and loan agency and custody and clearing.