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Private equity firms have, to date, avoided much of the regulation faced by US hedge fund managers. But it’s only a matter of time before they too will face enhanced transparency demands and regulatory reporting.
In Europe, under the AIFM Directive, this is already becoming a reality. The days of self-administration could become a thing of the past, particularly as investor profiles are also changing. As banks look to strengthen their balance sheets, large institutional investors are stepping in to their place and calling for greater portfolio information on a more frequent basis.
“Because of regulation and investor demands, PE
Big data’: That’s the catchphrase in today’s climate of regulatory overhaul, and it’s something that hedge fund administrators are deeply focused on addressing.
Lonnie Macdonald (pictured), President of JD Clark & Company, the hedge fund administration division of UMB Fund Services, believes that the toughest part of delivering ‘Big Data’ is doing so in a way that meets the needs of each individual client. Minimal disruption is the aim of the game.
“People are funny about their data. They are used to how they receive it today and they don’t want you as their service provider to change that; they
By Dan Matthies, Bloomberg – In the space of just five years, the financial services industry has seen remarkable change: the rise of automated trading appliances; a global economic meltdown and subsequent recovery; and now, sweeping financial regulations. No matter the size of your fund, the investment environment has only been getting tougher amid heightened regulation and tightened margins.
With the ASIC Regulatory Guide 240, the glare of greater disclosure requirements is likely to be cast over hedge funds in early 2014. Being ready for these new requirements can complicate your existing workflow and further eat into margins with increased
By James Williams – “Even though as a quantitative trading firm with a lot of technology infrastructure in place we’ve been able to handle a lot of the regulatory requirements internally, we can’t do everything. We’ve had to lean a little more on our service providers, in particular consulting our legal advisers, over the last 12 months,” explains Ken Shoji, COO of New York-based GSB Podium Advisors, an equity statistical arbitrage fund.
Hedge fund managers face a delicate balancing act. On the one hand investors are increasingly looking to negotiate more favourable fees. On the other hand, the depth and
By Michael Rucci (pictured), head of fund ervices Americas, UBS Global Asset Management – How does AIFMD impact how I can market in Europe?
AIFMD will challenge many managers but it will also, over time, offer opportunities to attract capital that has previously been unavailable to the alternative asset management industry. Consequently, as a result of the Directive all EEA managers need to make an application for authorisation by July 22, 2014 Regulators are urging the industry to apply sooner rather than later in 2014.
From the date of authorisation these managers will have a passport to distribute EEA AIFs across all
In August, the Financial Times reported that more than half of US hedge fund groups had launched, or were in the process of launching, traditional mutual funds, otherwise known as 40 Act funds. The objective is simple: to widen out a manager’s overall investor base. But it’s not just hedge fund managers launching long-only funds. Increasingly, in the US, traditional managers are looking to launch onshore hedge funds to also widen their investor base.
“Not all of their clientele have the appetite for an alternative product but for the ones that do, traditional managers want to consolidate and have a
"Emerging managers under the USD200million AuM mark struggle to get the necessary reporting needs from their service providers because of the high cost of ownership,” explains Scott Price, Regional Director, Americas, Custom House Global Fund Services, one of the industry’s leading hedge fund administrators.
“We’ve developed a platform that is scalable and cost sensitive for the underlying managers. It’s ideal for managers who want to leverage the infrastructure of its administrators to deliver daily reconciled portfolio reporting and as well risk and advanced P&L to their investors.”
The platform in question is Custom House Gateway, due to be hard
By Geoff Ruddick, IMS Fund Services: Independence – Independence is the ‘holy grail’ of effective corporate governance. If a director is not independent, conflicts of interest will inevitably arise and interfere with the director’s ability to act in the best interests of the fund.
Experience – You will get a good idea of a director’s experience from their ‘bio’, which will appear in the offering document of the fund. Confirm they have experience serving on boards with similar strategies. Although independent directors do not need to be experts, a general understanding of the fundamentals of the underlying strategy is essential.
Next July marks the introduction of the Foreign Account Tax Compliance Act (FATCA). To meet the demands of this far-reaching legislation, US Bancorp Fund Services, LLC is working proactively to implement innovative technology resources and modifications to internal procedures to streamline compliance and reporting processes and minimise the burden placed on managers.
“For fund administrators, and the industry as a whole, the biggest challenge is the sheer volume of information on individual investors that will need to be managed. To overcome this issue, we must address the need for intuitive technology solutions to promote the automated processing of investor activity
Deutsche Asset and Wealth Management (DeAWM) is expanding its expertise in the management of passive investment products with appointment of Martin Weithofer as head of smart beta.
Weithofer will be based in Frankfurt and will report to Reinhard Bellet, head of passive asset management worldwide. His main role will be the expansion and development of DeAWM’s smart beta offering.
Bellet says: "The development of passive smart beta solutions and products is a natural evolution of the passive asset management business, and it is an area that is certainly attracting the attention of investors. We want to be at the
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