Developments In Fund Governance and the Regulatory Outlook

Developments in fund governance

Caroline Hoare, Director, IPAF (UK) Ltd
John McCann, CEO, Trinity Fund Administration

Bill Prew, CEO, INDOS Financial

Bill Prew: We are going to start by looking at developments in the fund governance arena. Governance has changed a lot over the last five years. Caroline, could you explain where you see the industry now and how things have evolved over the last few years?

Caroline Hoare: I'd say it's a tale of two parts. Undoubtedly many funds now take the issue of governance very seriously. We often find that when people are forming their boards the consultation process might involve up to 20 different people. But I do still get calls from people saying they've been offered a “buy-one, get-one-free” offer; those conversations tend to be extremely short!

BP: Most people recognise that progress has been made and there are boards that are particularly well run. Why do you think there are still boards that aren't run particularly well?

The Hedge Fund Journal Awards 2016

Hedge Funds – Prime Brokerage Sales – Outstanding Contribution
Duncan Crawford

Best Real-Time Portfolio, Risk and Regulatory Solutions Award
Imagine Software

Best Regulatory Practice
Simmons & Simmons

Leading Hedge Fund Administrator
Centaur Fund Services

Leading Business Services Practice

Leading Global Provider of Services to Hedge Funds

The Leading Regulatory Compliance Consulting Firm

The Leading Offshore Law Firm
Maples and Calder

The Leading European Practice - London, Dublin, Luxembourg, Frankfurt & Paris

Best IT Security Service

Best Global Multi-Asset Prime Brokerage
Societe Generale Prime Services

Best Global Marketing Communications Agency
Peregrine Communications

The Leading Hedge Fund Investment Advisory Firm
Sussex Partners

Best Fund Accounting & Reporting Software Provider
SS&C Advent  

The Leading Provider of Non-Executive, Independent Directorship Services
A.R.C. Directors

The Leading Irish Law Firm
Dillon Eustace  

The Leading Global Law Firm
Schulte Roth & Zabel

The Leading UCITS Hedge Fund Platform



UCITS Hedge Awards 2015 - Winners

Best Performing Long/Short Equity – UK
Smith & Williamson Enterprise Fund (Smith & Williamson)

Best Performing Long/Short Equity – Europe
Melchior Selected Trust European Enhanced Absolute Return (Dalton Strategic Partnership)

Best Performing Long/Short Equity – Nordic Fund
Norron Select Fund (Norron Asset Management)

Best Performing Long/Short Equity – US  
Serviced Platform SICAV - Select Equity Long Short UCITS Fund (Goldman Sachs)  

Best Performing Long/Short Equity – Global
SEB Prime Solutions Sissener Canopus (Sissener)

Best Performing Long/Short Equity – Style Specific
Kairos International Sicav – KEY Fund (Kairos)

Best Performing Equity Market Neutral Fund
Old Mutual Global Equity Absolute Return Fund (Old Mutual Global Investors)

Best Performing Asia Fund
MS Dalton Asia Pacific UCITS Fund (Dalton Investments)

Best Performing Credit Fund
PVE Credit Value Fund (PVE Capital)

Best Performing Emerging Markets Debt Fund
Absolute Insight Emerging Market Debt Fund (Insight Investment)

Best Performing CTA Fund
Man AHL Diversity (Man AHL)

Best Performing Fixed Income Global Fund
Pictet-Absolute Return Fixed Income (Pictet Asset Management)

Best Performing Volatility Fund
Athena UI Fund (Conservative Concept Portfolio Management AG)

Best Performing Emerging Markets Long/Short Equity Fund
RAM L/S Emerging Markets Equities (RAM Active Investments)

Best Performing Macro Systematic Fund
α generix Global Macro UCITS SF (LGT Capital Partners)

Hedge Funds – Compliance, Governance, Regulatory Reporting and Tax

A half-day conference, free to attend for managers and investors.

Date: Wednesday 26th November 2014
Venue: London Stock Exchange, 10 Paternoster Square, London EC4M 7LS

To request a free place please email rod.sparks@thehedgefundjournal.com



From 8.15am

After the AIFMD Apocalypse: The Future for the Regulation of Hedge Funds in Europe
Chris Leonard, Partner, Akin Gump Strauss Hauer & Feld

Governance – Fund and Corporate
Raymond O’Neill, Principal, A.R.C. Directors



Interacting with the FCA
Will Morrell, Consultant, Cordium

Carried Interest - Structuring Compensation Awards
Fiona Carpenter, EMEIA Leader, Global Hedge Fund Services, EY


Event finish

Click here to download programme (PDF)



UCITS Hedge Awards 2014 - Winners

Best Performing Long/Short Equity – Japan Fund
Martin Currie GF Japan Absolute Alpha Fund (Martin Currie)

Best Performing FX Fund
DB Platinum Currency Returns Plus Fund (DB Platinum Advisors)

Best Performing Long/Short Equity - North America Fund
DB Platinum Omega Fund (Omega Advisors Inc)

Best Performing New Fund
Lyxor/Tiedemann Arbitrage Strategy Fund (Lyxor Asset Management)

Best Performing Event Driven Fund
MS PSAM Global Event UCITS Fund (PSAM)

Best Performing Macro Discretionary Fund
Absolute Return Government Bond Fund (Ignis Asset Management)

Best Performing Multi-Strategy Fund
JABCAP (Lux) – Global Balanced Fund (Jabre Capital)

Best Performing Long/Short Equity – Global Fund
SEB Prime Solutions Sissener Canopus (Sissener)

Best performing Long/Short Equity – Europe Fund
Henderson European Absolute Return Fund (Henderson Global Investors)

Best Performing Long/Short Equity – Asia Fund
Indus PacifiChoice Asia Fund (Indus Capital)

Best Performing Relative Value - Fixed Income (incl. Credit) Fund
Byron Fixed Income Alpha Fund (Byron Capital Partners Ltd)

Best Performing Relative Value - Equity Fund
Old Mutual Global Equity Absolute Return Fund (Old Mutual Global Investors)

Best Performing Risk Arbitrage Fund
Castlerigg Merger Arbitrage UCITS Fund (Sandell Asset Management)

Best Performing Long/Short Equity Global – Emerging Markets Fund
Skyline UCITS Fund (Skyline Capital Management)

Best Performing Convertible Bond Arbitrage Fund
Salar Convertible Absolute Return Fund (Ferox Capital)

Edited Transcript

The following is an edited transcript of a seminar hosted by Simmons & Simmons and Eze Castle Integration.

Andrea Finn - Simmons & Simmons (AF): In terms of the issues which I think are key for hedge fund managers and which we’ll touch on through the questions today are questions of status: employees and members and how managers make decisions as to whether an individual should be a member or an employee. Issues of remuneration are a very hot topic because it affects people very personally, as everyone will be aware. There’s a lot of regulation on this, primarily from a European standpoint but also being implemented into the UK.

Then thirdly, there’s business protection. There’s a lot of effort and money that goes into building up businesses and generating revenue and that sits in the heads and hands quite often of individual employees. So when we look at how hedge fund businesses can protect themselves from employees when they move on, we look at things like their contractual arrangements, but also practical things around how the business is operated and with a slight tie-in to what Simon and Alex might talk about, IT protection, and what I’m told are called ‘Intrusion Detection Systems’ which allow you to pick up misuse of IT.

Alex Brown - Simmons & Simmons (AB): We have a dedicated group that deals just with technology and outsourcing contracts. But also advisory areas like data protection. We do a lot of work in the financial sector and also for our funds clients.

I think it’s a very interesting area to work in, because it’s a constantly evolving set of factors that we have to think about. Current hot topics of course are things like cloud computing and how you reconcile those technologies with data protection legislation, which in the UK stems from about 12 or 13 years ago, very much before the inception of these sorts of technologies.

Advent 6th London Hedge Fund Summit

Advent Software held its 6th Annual Hedge Fund Summit on 18th November in London. Participants included Jeremy Charles, chief operating officer, Thames River Capital, Mark Harrison, managing director, European head of prime finance at Citi, Drew Douglas co-head of HSBC Security Services and Joanna Perkins, director, Financial Markets Law Committee. The discussion looked at what hedge funds and service providers are doing to protect themselves from future market turmoil and what impact this is having on managers, prime brokers and administrators.

Jeremy Charles, Thames River Capital: Because most funds have performed well the fact that assets are flat means there has actually been a decline. I also wonder whether we are an industry. Did we lobby effectively on the mess that hit us? Why have we failed to get our story across? I don’t think we are an industry at all. I think we are a series of investment managers who are trying to manage money in a more modern style that the regulator hasn’t caught up with. We are a collection of investment management techniques.

Whatever we think about assets coming in, they are going to have to come back in a different way. Investors want absolute return investment capability. They want managers who can actually hedge and take away the risk. That is demonstrated by the assets that came in. But we have a reputation problem. The industry has to change.

Funds of hedge funds are not very good at showing underlying liquidity. Getting transparency and showing the liquidity we have is fundamental. Counterparty risk is another obvious issue from 2008. What are we doing about demonstrating how we manage counterparty risk? We weren’t very good at getting close to our investors and helping them understand it and the financing. We have to rework the model given the perception out there.

Hedge Funds Care 5th Annual Gala

Hedge Funds Care UK, the alliance of hedge fund industry professionals committed to protecting children from abuse and neglect, held its fifth annual London fundraising gala on 2 December 2010.

More than 400 hedge fund industry professionals gathered at the Grange St. Paul’s Hotel in London at the event hosted by the Patron of the charity, Esther Rantzen OBE. Cabaret was provided by Alistair McGowan and the auction, featuring items such a signed Status Quo guitar and a luxury holiday in Barbados, was conducted by Lord Jeffrey Archer.

The event raised £250,000 for charities working with abused children in the UK. Last year, Hedge Funds Care UK made grants to a number of charities including Red Balloon for their work with severely bullied children, Barnardos for their project working with sexually exploited girls and young women and CSV, a program that trains volunteers to work with young people coming out of care. The UK charity has raised over £1 million through its annual gala events and numerous summer and cultural events held over the last five years.

Robert Mirsky, Chairman, Hedge Funds Care UK, said: “This was another great event and I would like to thank our supporters for their enthusiasm and continued commitment.

Notz Stucki Investor Conference

Some 200 investors participated in the 2011 Notz Stucki Investor Conference that the alternative asset manager hosted in Geneva in mid-January. Founded in 1964, Notz Stucki’s portfolio managers have invested through a wide variety of market conditions, but it is a fair bet that the current environment is unique in offering such an unusually wide range of possible economic outcomes. The conference heard from three macroeconomic strategists and an emerging markets specialist.

The proceedings opened with Anatale Kaletski, chief economist of Gavekal. He enunciated the broad theme that the world economic recovery is moving from recovery mode where growth rebounded to a new phase of steady expansion. To his mind, it means that the quality of the assets in investor portfolios will need to change.

Economic history: a new phase
Kaletski argued that over the past 15 years two crucial points have emerged about world economic history. One is that capitalism is an ever-changing, evolutionary process. Over 200 years it has gone through three phases – the classical model in the 19th century, the Keynesian reforms of the 1930s and the Thatcher/Regan revolution of the early 1980s – but is now entering a fourth phase. This is the transformational event that began with the post 2007-08 financial collapse and is expected to continue for many years. Kaletski is sure this will result in the evolution of a stronger system since crises, as Karl Marx noted, are a natural part of the evolution of market economies.

Overlaying these events are changes that he terms ‘unidirectional’, which are bringing about an irreversible transformation. Thus in quick succession over the past two decades the world has witnessed four mega-trends: the end of communism, the rise of Asia, the technology revolution and, finally, the attainment of supremacy for paper money over real assets like gem stones or gold.


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