All investment management firms need to pay very careful attention to a recent paper issued by the UK’s Financial Services Authority (FSA) concerning the management of conflicts of interest between asset management firms and their customers.
This industry trend is being driven by investors who consider that the challenges of such a model are far outweighed by the benefits provided to them by a board that will be more effective in all situations.
It is universally accepted that it is not possible for such large amounts of money to be mobilized by efforts of the public sector alone. A step change in the current state of climate finance with the inclusion of the private sector is essential to achieving this. A metaphorical revolution in climate finance is needed.
We have identified certain red flags that we have seen in more than one situation and provide some practical guidance that investors may wish to consider to mitigate the risk of being victims of a fraud.
In the long run, private fund advisers may decide to forego the services of third party service providers and device strategies that allow them to fulfill their reporting obligations under the Dodd-Frank Act more effectively, thus lowering compliance costs further.
The enforcement division of the SEC’s Asset Management Unit has recently brought a number of complaints against various hedge funds and their investment managers.
Institutional investors face an almost unprecedented set of challenges. The post-crisis period has been one of slow economic growth, low or even negative real interest rates, volatile markets and increasing geo-political pressures.
The Cayman director class has not helped its cause as some (but by no means all) of its members resist exercising self-restraint, do not limit the number of directorships they take on, and become rather defensive and secretive when asked about the number of directorships they hold.
Politicians make much of sharing values with their constituents, though they struggle at times to elucidate precisely what those values are and what it is that is of value to both sides of the equation.
Concerns in the U.S. and Europe over security leaks and the debate about access to public versus private information runs in some ways parallel to the discussion regarding the information investors prefer and require to make informed decisions about their investments in Cayman Islands funds.
With the global hedge fund industry transitioning into a new era of heightened regulation and stricter fund governance, the Cayman Islands are extremely well placed to respond to the associated challenges.