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Good Risk Governance Pays

Investment Best Practices | Risk Management | Valuation

Category Archives: Hedge Fund

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Tradeoff Between Lower Hedge Fund Fees and Longer Lock Ups

Posted in Fees, Hedge Fund, Liquidity
As I’ve written many times, assessing whether a product or strategy makes sense for a particular investor (whether individual or institutional) depends on facts and circumstances. At a minimum, one has to consider what an investor seeks to accomplish, relevant constraints, need for liquidity, overall risk tolerance and the risk-return profile of the product or strategy. Costs… Continue Reading

Puerto Rico and Its Bondholders

Posted in Credit Risk, Hedge Fund, Investment Management, Litigation, Municipal Bonds, Susan Mangiero
After a round of holiday hellos during dinner with a group of friends, the conversation turned to Puerto Rico and its financial distress. One gentleman at the table has a lot of his 401(k) account invested in municipal bonds, including a hefty allocation to Puerto Rico. Naturally he is nervously watching events and hoping for the best. From his… Continue Reading

Investment Transparency Now Required in Rhode Island

Posted in Disclosure and Transparency, Fees, Hedge Fund, Investment Management, Pension
Just a few days after the U.S. Securities and Exchange Commission (“SEC”) voted to officially propose that certain registered funds provide a lot more information about their operations, the State of Rhode Island has followed suit. In a May 26, 2015 press release, General Treasurer Seth Magaziner describes the Ocean State as a leader in… Continue Reading

SEC Reports Strong Enforcement Year Due to New Analytical Tools

Posted in Compliance, Disclosure and Transparency, Financial Reporting, Hedge Fund, Regulation
According to an October 16, 2014 press release, the U.S. Securities and Exchange Commission (“SEC”) reports a “record 755 enforcement actions covering a wide range of misconduct, and obtained orders totaling $4.16 billion in disgorgement and penalties…” for the fiscal year-end ending in September 2014. One reason given for this increase from prior years is the “enhanced use of data… Continue Reading

Expert Networks and Fiduciary Duties

Posted in Disclosure and Transparency, Financial Expert, Hedge Fund, Insider Trading, Pension, Regulation
I was recently asked by an attorney I know for my governance opinion about the use of expert networks. He has a pension fund client that is pondering whether to allocate money to a hedge fund that is a frequent user of expert network services. As is typically the case, I answered “It depends.” Is… Continue Reading

Institutional Investors Uniting Over Limited Partner Terms

Posted in Disclosure and Transparency, Fiduciary Liability, Hedge Fund, Private Equity, Venture Capital
During a recent trip to London, I had a fascinating discussion with a UK attorney who advises institutional investors on contract terms. One of her admonitions to clients is to negotiate hard with a general partner and embrace the power of the purse rather than accept less favorable terms with respect to fees, transparency and… Continue Reading

Due Diligence & Regulatory Hot Buttons: What Advisors Need to Know About Liquid Alts

Posted in Derivatives, Hedge Fund, Liquidity, Mutual Funds
I am delighted to join a top-notch panel of financial speakers to talk about the explosive growth in the liquid alternatives (“alts”) market. Courtesy of the Center for Due Diligence, our session will take place on October 15, 2014 in San Antonio, Texas and will be part of what is expected to be a lively and informative conference… Continue Reading

Hedge Fund and Private Equity Fund General Counsel Workshop

Posted in Compliance, Hedge Fund, Investment Management, Private Equity
I am pleased to announce that I will be presenting on April 23 as part of an educational and timely convening for hedge fund and private equity fund General Counsel, legal staff and compliance professionals. Presented by Dechert‘s Financial Services and White Collar and Securities Litigation Groups, this workshop will include sessions as described below. SEC and Investor Areas of… Continue Reading

ERISA Pension Plan Investing in Hedge Funds and Private Equity Funds

Posted in ERISA, Hedge Fund, Litigation
If you are interested in attending “ERISA Pension Plans: Mitigating Liability Risks for Hedge and Private Equity Fund Alternative Investments: Exercising Due Diligence to Avoid Investment Landmines for Institutional Investors and Fund Managers,” you can email contact@fiduciaryleadership.com if you would like one of the nine (9) guest passes that have been made available to me.… Continue Reading

ERISA Pension Plans: Mitigating Liability Risks for Hedge and Private Equity Fund Alternative Investments

Posted in ERISA, Hedge Fund, Private Equity
I have the pleasure of being part of an April 17, 2014 program for Strafford’s continuing legal education offerings for and about ERISA plans. As a courtesy, I can invite up to ten (10) professionals as my guest. If you are interested, send an email to contact@fiduciaryleadership.com with your name, email address, title and company… Continue Reading

Muni Bonds, Pensions and Financial Disclosures

Posted in Compliance, Derivatives, Disclosure and Transparency, Financial Reporting, Hedge Fund, Liquidity, Litigation, Municipal Bonds, Pension, Regulation
I had the pleasure of co-presenting on February 19 with senior attorney Elaine Greenberg as part of an educational briefing for the Practising Law Institute. A partner with Orrick, Herrington & Sutcliffe LLP and the former chief of the Municipal Securities and Public Pensions Enforcement Unit, part of the U.S. Securities and Exchange Commission (“SEC”), Attorney… Continue Reading

Foreign Corrupt Practices Act Settlements Are Costly

Posted in Compliance, Governance, Hedge Fund, Private Equity, Regulation
Beauty makes for great headlines these days. Mercedes-Benz Fashion Week in New York City just wrapped up. A few days ago, Pantone declared radiant orchid as its 2014 “Color of the Year.” Now, cosmetic giant, Avon Products, is reported to be in settlement talks with government regulators regarding Foreign Corrupt Practices Act (“FCPA”) compliance issues.… Continue Reading

Hedge Funds Invest In Muni Bonds

Posted in Hedge Fund, Municipal Bonds
The nearly $4 trillion muni bond market could be in for some big changes if hedge funds have their way. Traditionally, a retail-focused market, hedgies are showing keen interest in fixed income securities that are issued by public entities such as states and cities. Notwithstanding the negative headlines about bankruptcy filings in Detroit and elsewhere,… Continue Reading

QPAM and INHAM Compliance Audit Information For Hedge Funds

Posted in Compliance, ERISA, Governance, Hedge Fund
If you missed the September 10, 2013 webinar entitled “ERISA Assets: QPAM and INHAM Audit Legal Requirements and Best Practices – Navigating DOL Rules for Pension Asset Management Compliance,” click to access the slides. Produced as a Strafford Continuing Legal Education webinar and featuring ERISA attorney Howard Seyfarth, auditor Virginia Bartlett and investment compliance expert… Continue Reading

Susan Mangiero Attends FI360 Insights Conference on Fiduciary Standards of Care for Investors

Posted in Fiduciary Liability, Financial Expert, Hedge Fund, Private Equity, Valuation
Protecting investors and improving the quality of investment advice were once again themes at the ninth annual fi360 Conference in Scottsdale, Arizona. With two full days of educational content covering 32 distinct topics, the event provided investment advisors with expert insights on improving fiduciaryprocedures, benefits and risks common to investment products, the current state of… Continue Reading

Qualified Professional Asset Manager (QPAM) Webinar Slides

Posted in Compliance, ERISA, Hedge Fund, Investment Management, Regulation
The U.S. Department of Labor estimates that there are roughly 4,400 financial organizations relying upon the DOL’s Qualified Professional Asset Manager (“QPAM”) class exemption when managing the assets of their own employee benefit plans. Maintaining QPAM status is important for these asset managers as this class exemption facilitates their ability to make investment decisions with… Continue Reading

SEC Chief Announces Hedge Fund Enforcement Priorities and Fiduciary Lens

Posted in Compliance, Hedge Fund, Liquidity, Regulation, Risk Management, Valuation
Hedge funds have some new items to add to their “to do” list for 2013. In a recent talk before compliance professionals, Bruce Karpati, Chief of the Asset Management Unit (part of the Division of Enforcement of the U.S. Securities and Exchange Commission), gave the audience a roadmap to his opinions about the priorities in… Continue Reading

New Study About Private Equity Limited Partners (LPs)

Posted in Hedge Fund, Private Equity
Kudos to authors of the 2013 Capital Markets Report, published as part of the Pepperdine Private Capital Markets Project. Drawing from numerous discussions with participants in the private equity industry, readers get insights abouty a variety of important topics. The section that caught the eye of blogger Dr. Susan Mangiero concerns lmiited partners such as… Continue Reading

CFTC Regulation and Compliance: Not Just for Commodities Brokers Anymore

Posted in Broker Dealers, Commodities, Compliance, Disclosure and Transparency, Financial Reporting, Hedge Fund, Regulation, Trading
Although the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed over two years ago, regulators and financial market participants are still grappling with its complexities. Some aspects are still being finalized which adds to the challenge of compliance. According to “U.S. regulators yet to implement one-third of Dodd-Frank rules” by reporter Pat Dulnier (Bank… Continue Reading

SEC Enforcement of Hedge Fund Valuation Reporting

Posted in Compliance, Hedge Fund, Valuation
Adding to its enforcement actions, the U.S. Securities and Exchange Commission (“SEC”) has charged a former $1 billion hedge fund advisory firm, its founder and its chief financial officer with inflating asset values. As a result, regulators assert that pension funds and other investors were misled about the safety and liquidity of the investments and… Continue Reading

QPAM and INHAM Compliance Audit 101 For ERISA Asset Managers

Posted in Compliance, ERISA, Hedge Fund, Investment Management, Private Equity
  In this timely and informative webinar hosted by FTI Consulting, legal and compliance experts will provide critical information about the Qualified Professional Asset Manager (“QPAM”) exemption and related compliance audit requirement that applies to numerous financial institutions that manage or want to manage ERISA pension money. Speakers will likewise address the merits of managing money for captive… Continue Reading

Investment Style Drift and Litigation

Posted in Disclosure and Transparency, ERISA, Hedge Fund, Investment Management, Litigation
  Unlike Confucius who extolled the virtues of travel when he said that “A thousand miles begins with a single step,” change may not be a good thing for asset managers and their investors. In recent presentations by attorneys, I have heard more said about litigation related to investment style drift than ever before. The… Continue Reading