Hedge funds were a key subject of debate during the passage of Dodd-Frank. While the funds were not tied to the causes of the market crisis, they do represent large pools of assets which can impact the market. Regulators frequently note that they have inadequate information about the funds. Accordingly...
Finally, the SEC is going to take some action today on
the regulation of investment advisers, venture capital funds, and private fund
For years, they've been trying to get regulatory control
of private funds. Now they are going to get it.
Do they really want it?
In one of the most visible moves as a result of the new
SEC regulations on investment advisers, George Soros is closing his $25 billion
Quantum Endowment Fund to outside investors and returning their money.
"We have relied until now on other exemptions from
registration which allowed...
At least one of the hedge funds being investigated for
its use of expert networks in based in Massachusetts. In an unusual instance of
the state regulators acting before Securities and Exchange Commission, the
Massachusetts securities regulators are proposing a new regulation to address
the use of...
Hedge funds usually give their limited partners an
ability to redeem their interests at certain periods during the investment
period. That ability is often subject to a "gates provision" that limits a
quick outflow of capital. The provision is general there to avoid a liquidity
The role of directors on offshore hedge funds has often been,
at best, a limited oversight role, with perfunctory annual meetings and limited
interchange with the fund itself during the year.* This has been changing
- slowly- as compliance moves to the top of the list of concerns for investors
Securities regulations have many goals (prevention
of misdeeds, market stability, investor protection), however, for those who
can navigate the system, new hedge fund regulations will have the
effect of increasing transparency for hedge fund investors. While recent moves
appear to be primarily aimed...
Most investors contemplating investing in a hedge
fund believe they are presented with a set of fixed terms for
their investment. These terms are outlined in the private offering memorandum
and appear to apply across the board to all investors. However, careful
readers of the offering memo as well...
Some interesting news today out of the SEC about new
enforcement actions by the SEC against hedge funds - specifically, against
three separate advisory firms and six individuals for alleged violations
initially uncovered through the results of SEC proprietary data analysis.
That final point may...
Insider trading is an area of risk that hedge
fund management finds very difficult to identify and prevent. While the
problem has become increasingly prevalent, the tools to be able to assist hedge
fund managers have not expanded proportionately. A break-down in personal
trust in the industry as...
I don't own any Apple stock, but their announcement about
what they're planning to do with their big stockpile of cash caught my
attention. Not because I'm going to rush out and buy the stock, but because of
My analysis of when fund managers need to register with
Hedge fund style "drift" is
said to occur when a hedge fund manager strays from their stated investment
strategy. The term used to be an esoteric one, used only by professional
hedge fund analysts. However, "drifting" is a problem that is lately coming
into view more by regulators...
The hedge fund world has always walked a fine line when
it comes to attracting new investors. And nowhere has this line been
thinner than the one between "finders" and "solicitors" - the parties who
act as the middlemen in the investor location process.
According to SEC rules...
There are indications from Washington that hedge funds,
long exempt from anti-money laundering reporting rules, may soon be
brought into the fold under new rules proposed by the Treasury
Department's Financial Crimes Enforcement Network (FinCEN).
Rule-making issues aside, hedge fund managers...
Once viewed as a luxury reserved for only the largest hedge funds, compliance technology has entered the mainstream. The complexity of reporting obligations, combined with the expanded number of hedge fund investment advisers that are now registered with the SEC and CFTC, are the drivers of the increased...
Rhode Island has put 14 percent, or $1 billion, of its $7.5 billion in pension fund assets into a form of investment generally considered the exclusive province of sophisticated money managers and wealthy investors: hedge funds. The state is now short selling, leveraging and spread trading in Asian futures...
A pair of experienced investment bankers are moving into the marijuana business. They've set up a private equity firm that will buy up businesses in the medical marijuana industry and the nascent market for legalized recreational pot. Brendan Kennedy, one of the cofounders of Privateer Holdings,...
The impact of the October 1 shutdown of the federal government on hedge funds is now playing out in slow motion. While the SEC remains open due to its ability to self-fund for a few weeks, its sister agency, the CFTC has shut down. These are the agencies that provide oversight to the securities and commodities...
Trading ahead of client accounts. Insider trading. Breach of fiduciary duty.
These were just some of the concerns that the SEC had when it adopted the requirement for investment advisers to establish policies to monitor employee personal trading in 2004. While seemingly straightforward, in the decade...
The cybersecurity of hedge fund data is now a front-burner issue for many firms. In the wake of recent NSA leaks, privacy breaches and hacking scandals, both the regulators and the firms themselves have moved this up in the list of concerns. Issues relate to both the integrity of internal hedge fund...
Pressures have been mounting on hedge fund managers to hedge their own businesses and diversify away from the hedge fund model itself. Lackluster performance, difficult markets, fees that are perceived as too high, scandals and conflicts of interests are just a few of the factors that are leading managers...