http://aima.org/ http://eu.wiley.com/WileyCDA/WileyTitle/productCd-047037909X.html 2009 http://eu.wiley.com/WileyCDA/WileyTitle/productCd-047041233X.html 2009 http://eu.wiley.com/WileyCDA/WileyTitle/productCd-0470197595.html 2009 http://eu.wiley.com/WileyCDA/WileyTitle/productCd-0470694262.html 2009 http://eu.wiley.com/WileyCDA/WileyTitle/productCd-0470987855.html 2009 http://ssrn.com/abstract=1342715 2009 http://ssrn.com/abstract=1344659 2009 http://ssrn.com/abstract=1344656 2009 http://ssrn.com/abstract=1340731 2009 http://ssrn.com/abstract=1358349 2009 http://ssrn.com/abstract=1331838 2009 http://ssrn.com/abstract=1345157 2009 http://ssrn.com/abstract=1350757 2009 http://ssrn.com/abstract=1335449 2009 http://ssrn.com/abstract=1343248 2009 http://ssrn.com/abstract=1343281 2009 http://ssrn.com/abstract=1354070 2009 http://ssrn.com/abstract=1325190 2009 http://ssrn.com/abstract=1337424 2009 http://ssrn.com/abstract=1346319 2009 http://ssrn.com/abstract=1335639 2009 http://ssrn.com/abstract=1358086 2009 http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/95A71534-8C41-4CEE-9A04B788F84FC3F2 2008 Less than 20 years ago hedge funds were on the fringes of the investment world Today they have become an industry in the mainstream on track to surpass 2 trillion in assets under management sometime in 2008 Since 1990 the number of funds has mushroomed from 640 to an estimated 9700 More to the point during that period hedge fund assets have risen at an impressive compound annual rate of 26 percent The question is how can the industry build on that success going forward Its traditional client bas http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/93FE949A-EF9B-4CA8-ABA05E56627D0D6F 2008 There has been much coverage press and industry activity with respect to valuations in the hedge fund industry in the last number of years Following the credit crunch and ensuing tightening of liquidity in the markets the scrutiny has intensified since Summer 2007 Valuation is extremely challenging for certain investment types in the current environment To begin it is useful to consider the importance of valuation Certain ldquo;market mythsrdquo; have developed causing issues in the valuation pr http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/04C38564-EB37-42B4-B3BC01F035E925D5 2008 Algorithmic strategies are being used increasingly to execute orders in electronic financial markets Algorithmic execution strategies break up an order which is large in comparison with available volume or bid into manageable slices which are then worked upon over time to reduce the total cost of execution What is the algo objective Historically in the equity markets execution performance has been measured against a posttrade benchmark such as VWAP the volumeweighted average price in the market http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/F0049909-ADAF-406F-8DCFA41286F9609C 2008 It is essential to find new ways or asset classes to deliver consistent and uncorrelated returns within the asset management industry The ldquo;time value of optionsrdquo; can deliver a desirable risk return profile because it is one of the asset classes which is not inflated A memory refresher: An option premium pays for the risk a seller of an option encounters to buysell an asset which the option is related to The dynamic of an option premium can be described by its partial derivatives known http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/15B9DA38-F09D-45EB-90C09810C59177EE 2008 This article will discuss the historical underpinning of the current boom in commodity prices and alert the busy reader to some unexpected pitfalls when investing in this theme We will conclude with some observations on how to potentially take advantage of this asset classrsquo; opportunities According to Bannister 2006 2007 over the very long term commodity producers periodically need sufficient pricing to replenish physical and human assets ldquo;Every 15 to 20 years farmers miners and driller http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/9B675B1F-DEC6-4A22-A64E4AB7DCB29194 2008 The introduction of UCITS III legislation across Europe means that traditional longonly fund managers are now able to implement hedge fundstyle investment strategies for clients in their pursuit of hedge fundlike returns In this article we look at the types of strategies being adopted by the mainstream and explain why there will always be investor appetite for ldquo;purerdquo; hedge funds When once asked what set him apart as the finest golfer of his generation Jack Nicklaus replied ldquo;I thin http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/736C7204-751E-4C78-84702C6F8957BBA7 2008 What is an Independent Director In January 2008 the Alternative Investment Management Association republished its Offshore Alternative Fund Directorsrsquo; Guide the 2008 Guide recommending that in order to be considered properly independent a director should have no executive function with regards to the fundrsquo;s investment manager investment adviser or affiliated companies Alternatively a director may hold an affiliation but have no responsibility for carrying out work on behalf of the fund http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/8FCD8C3E-EA87-4AE4-B9EA80D08EE2BE81 2008 Since the transposition of the first UCITS Directive 85611EC the investment fund industry has been subject to continuous changes in the tax and legal frameworks booming investor demand for investment funds and the increasing pace of financial product innovation The latest amendment of the UCITS framework issued in 2002 referred to as UCITS 3 paved the way for these trends to enter the UCITS passport world After full embracement of the Directive by the asset management industry the number of hig http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/8FD85B56-2679-4E47-B83587816A67BF5A 2008 Since 1 August 2007 there is a new fiscal regime available in the Netherlands for investment funds This regime was introduced in order to withstand increased competition from Luxembourg and Ireland as favourable regimes for investment funds Under this new fiscal regime there is no corporation tax or dividend withholding tax levied on investment funds In section 1 the reasons behind the legislative amendments are explained; section 2 describes the amendments to the existing fiscal regime; section http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/38AA4B67-362D-4DA9-8E22EDFC8109B463 2008 2007 turned out to be a tumultuous year with the collapse of the US subprime mortgage market sparking the socalled ldquo;credit crunchrdquo; and repercussions across the world ranging from the first bank run in the UK for well over 100 years to many billions of dollars of debts being written off by other banks Not surprisingly it turned out to be a year when there was a pronounced dispersion in the returns from hedge funds There were some highprofile casualties including some in the credit space http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/A8A486A4-8FA9-4127-BDC7F3E0B42743CC 2008 Introduction Hedge funds had a healthy year in 2007 with the composite Eurekahedge Hedge Fund Index up a solid 134 percent This compares favourably with performance during the last three calendar years ndash; 144 percent 2006 122 percent 2005 and 105 percent 2004 The yearrsquo;s performance has weathered credit related woes the attendant risk aversion and drying up of liquidity in the underlying markets which manifested themselves early in the third quarter of 2007 The ensuing down month August http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/4659E24B-1472-4545-AD533C1E90790A46 2008 News about closing hedge funds and a difficult legal and fiscal environment for these products in Germany is dominating the media Little is released about the growing demand predominantly from institutional investors for alternative investments like hedge funds The following article will present detailed figures about the German hedge fund market and analyse the developments in recent years Owing to declining stock markets during 2000 and 2003 and low interest rates in recent years institutional http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/7FB9AE63-7FCE-42BA-96ADC3D5215DC71C 2008 Since their first appearance in the market in the late 1980s separately managed hedge fund accounts managed accounts for short have become increasingly sophisticated The authorrsquo;s company has been working with managed account platforms for over fifteen years and in this article sets out some of the key features and benefits as well as some of the challenges which users of these powerful tools can face Not all managers are open to running managed accounts in parallel to their own funds Many e http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/7B97E40D-9D6F-454E-A90DCE7E5B49079D 2008 Funds of hedge funds FoHF have been and will continue to be an integral part of hedge fund investing While many investors can and have chosen to bypass FoHF structures in order to invest ldquo;directrdquo; for the past 10 years AUM under the FoHF structure grew faster than AUM for all hedge funds combined The reasons for this impressive growth are obvious FoHFs provide diversity among managers reduce risk and hold out the promise of net returns higher than the average hedge fund The long list of http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/77E2E21C-3547-4B81-A13F1640363F3BC8 2008 When considering the significance of operational risk in the hedge fund industry the well known and often cited study by Capco ldquo;Understanding and Mitigating Operational Risk in Hedge Fund Investmentsrdquo; 1 is frequently referenced Capco concludes that 50 percent of hedge fund failures ldquo;could be attributed to operational risk alonerdquo; Investors in Asian hedge funds frequently fail to understand how much greater the chances are of operational problems in Asia As the former manager o http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/323A715D-B6DD-47E8-B58F3D5B99315F8A 2008 Overview Latin America accounts for 6 percent of the worldrsquo;s GDP and 9 percent of the worldrsquo;s population1 Its capital markets are bigger than those numbers would suggestSimilarly it is not an exaggeration to say that Latin America is still an underrepresented region in the global hedge fund industry With an estimated US 34 billion of assets2 144 hedge fund managers Figure 1 it represents less than 2 percent of the total universe The majority of Latin hedge funds are focused on Brazilia http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/5E1A8FE6-0EEF-40B5-8E176D28D44ECC88 2008 Introduction In his preBudget Report PBR of 9 October 2007 the UK Chancellor proposed sweeping changes to the taxation of foreign domiciliaries living in the UK In addition the residence rules would be tweaked to make it harder for certain taxpayers to claim nonresidence status Since the PBR a consultation document has been issued in December 2007 asking for responses by 28 February 2008 Draft legislation was finally published on 18 January and is expected to be included in the 2008 Finance Bill http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/10B161B1-C896-455C-AAB4E4D420D3142D 2008 A number of legislative proposals introduced by the US Congress in 2007 beginning in the wake of the Fortress and Blackstone IPOs would if enacted have a significant impact on investors in and sponsors of private equity and hedge funds An initial proposal introduced one week before the launching of the Blackstone IPO could eliminate an existing exception to tax treatment Interests in corporations of partnerships which are publicly traded PTPs where a PTP; i earns sufficient levels of passive ldq http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/2713F554-5120-47B6-913F887415758387 2008 2007 will be remembered for the subprimecredit crisis and the impact of ldquo;cardboard collateralrdquo;2 2008 looks to be just as unsettling What does this portend for investors in hedge funds How will the directors of the corporate trustees of the unit trust or general partner of the limited partnership hedge fund respond Prospects ask many questions in due diligence questionnaires DDQs and meetings with promoters before investing and afterwards One of these assumes paramount importance: who i http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/BF0143F7-688F-4E98-AD4E445D07292797 2008 Introduction Some hedge funds are reporting steep losses and falling asset values This may prompt a rush to exit by their stakeholders and investors forcing sales of assets to raise cash to meet redemption requests This in turn could cause a number of investors to seek to redeem their interests in the funds The funds can either suspend redemptions or sell assets at depressed prices to meet these redemption requests Therefore stakeholders creditors directors fund managers and functionaries of the http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/5BDA80B8-2E88-4862-B6FCB2698673EED4 2008 Introduction In the winter 2007 issue of AIMA's Journal Mark Stapleton outlined the key reforms tabled in the offshore funds consultation document released on the 9th October 2007 The consultation document sought responses by the 9th of January 2008 It is clear from the level of participation in the debate on those reforms that this is a key issue for both investors and fund promoters and managers both in terms of potential impact on existing products in the market and the new FAIF product http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/567562D0-6E99-4C4D-963D748EFE4FA41E 2008 1 Introduction Jersey is further widening its capabilities as an offshore funds jurisdiction The introduction of a new Unregulated Funds Regime which commenced on 19 February 2008 will create two classes of investment fund which can be established without regulatory approval under Jersey's funds legislation Key features of the new unregulated funds include: bull; no audit requirement no limit on the number of investors no investment or borrowing restrictions and no need for Jersey servicepr http://papers.ssrn.com/abstract_id=1137914 2008 http://papers.ssrn.com/abstract_id=946298 2008 http://papers.ssrn.com/abstract_id=1088913 2008 http://papers.ssrn.com/abstract_id=1112858 2008 http://papers.ssrn.com/abstract_id=1081475 2008 http://aima.vmnet.pixl8.co.uk/en/knowledge_centre/sound-practices/GuidesSoundPractices.cfm 2008 http://papers.ssrn.com/abstract_id=1029644 2008 http://papers.ssrn.com/abstract_id=1101741 2008 http://papers.ssrn.com/abstract_id=1026683 2008 http://papers.ssrn.com/abstract_id=1151834 2008 http://papers.ssrn.com/abstract_id=1137924 2008 http://papers.ssrn.com/abstract_id=1108077 2008 http://papers.ssrn.com/abstract_id=1108735 2008 http://papers.ssrn.com/abstract_id=1081943 2008 http://papers.ssrn.com/abstract_id=1091421 2008 http://papers.ssrn.com/abstract_id=1107627 2008 http://papers.ssrn.com/abstract_id=1127669 2008 http://papers.ssrn.com/abstract_id=1108635 2008 http://www.bvca.co.uk/ 2008 http://papers.ssrn.com/abstract_id=1086341 2008 http://www.deutsche-bank.de/presse/en/download/2008_Alternative_Investment_Survey.pdf 2008 http://papers.ssrn.com/abstract_id=1093387 2008 http://papers.ssrn.com/abstract_id=1016904 2008 http://papers.ssrn.com/abstract_id=1135664 2008 http://papers.ssrn.com/abstract_id=1029195 2008 http://www.pellin.co.uk/HFWG/Final-Report.pdf 2008 http://papers.ssrn.com/abstract_id=1140982 2008 http://papers.ssrn.com/abstract_id=1120595 2008 http://papers.ssrn.com/abstract_id=1136902 2008 http://press.princeton.edu/titles/8635.html 2008 http://papers.ssrn.com/abstract_id=1088429 2008 http://papers.ssrn.com/abstract_id=1151835 2008 http://papers.ssrn.com/abstract_id=1141084 2008 http://papers.ssrn.com/abstract_id=1082943 2008 http://papers.ssrn.com/abstract_id=1130715 2008 http://papers.ssrn.com/abstract_id=1146468 2008 http://papers.ssrn.com/abstract_id=1082692 2008 http://papers.ssrn.com/abstract_id=1151564 2008 http://papers.ssrn.com/abstract_id=1123362 2008 http://papers.ssrn.com/abstract_id=967788 2008 http://www.wiley-vch.de/publish/dt/books/newTitles200802/0-470-18169-9/?sID= 2008 http://papers.ssrn.com/abstract_id=1091590 2008 http://papers.ssrn.com/abstract_id=1129182 2008 http://papers.ssrn.com/abstract_id=1137550 2008 http://papers.ssrn.com/abstract_id=1066808 2008 http://papers.ssrn.com/abstract_id=1088845 2008 http://papers.ssrn.com/abstract_id=1103215 2008 http://papers.ssrn.com/abstract_id=1111778 2008 http://papers.ssrn.com/abstract_id=1106654 2008 http://papers.ssrn.com/abstract_id=1142844 2008 http://papers.ssrn.com/abstract_id=1079532 2008 http://papers.ssrn.com/abstract_id=1086687 2008 http://papers.ssrn.com/abstract_id=1127042 2008 http://papers.ssrn.com/abstract_id=1115537 2008 http://papers.ssrn.com/abstract_id=1108817 2008 https://www.gam.com/NR/rdonlyres/1DF50539-6F23-4DD3-B0F8-7BA793650683/0/ZHAWSurveyFINAL.pdf 2008 http://rimer.butterworths.co.uk/webcat/enquiry/product/product_detail.asp?ProdID=4310 2008 http://ssrn.com/abstract=1168799 2008 http://ssrn.com/abstract=1194282 2008 http://ssrn.com/abstract=1221882 2008 http://ssrn.com/abstract=885945 2008 http://ssrn.com/abstract=1160273 2008 http://www.ifsl.org.uk/upload/CBS_Hedge_Funds_2008.pdf 2008 http://www.booksonbiz.com/estore/index.php?main_page=pubs_product_book_info&cPath=99&products_id=1440 2008 http://www.booksonbiz.com/estore/index.php?main_page=pubs_product_book_info&cPath=99&products_id=1310 2008 http://eu.wiley.com/WileyCDA/WileyTitle/productCd-0470997990.html 2008 http://eu.wiley.com/WileyCDA/WileyTitle/productCd-0471792187.html 2008 http://eu.wiley.com/WileyCDA/WileyTitle/productCd-0470372346.html 2008 http://eu.wiley.com/WileyCDA/WileyTitle/productCd-0470722991.html 2008 http://eu.wiley.com/WileyCDA/WileyTitle/productCd-047075446X.html 2008 http://eu.wiley.com/WileyCDA/WileyTitle/productCd-0470118725.html 2008 http://eu.wiley.com/WileyCDA/WileyTitle/productCd-3527503757.html 2008 http://www.hedgeindex.com/hedgeindex/documents/Seeking%20Returns%20in%20Turbulent%20Markets_Aug%2008.pdf 2008 http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/36060B61-0544-47D1-B9E126F85B4EA4F0 2008 IntroductionUntil recently the benefits of diversification in portfolio management have never been questioned No one would argue that a portfolio of more than 40 stocks is overdiversified whereas everybody would agree that an equity index could well be replicated with 20 stocks In the alternative investment world some people state that when a portfolio of hedge funds contains more than 20 single hedge funds it becomes overdiversified see Lhabitant and Learned 2004 Adding further funds to the por http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/2DD2D614-CB7A-4BAD-8AE575ACB939C7DD 2008 The last twelve months has been a challenging time for many hedge funds seeking to manage liquidity issues particularly for those funds with a leveraged exposure to the credit markets In an environment where investment managers continue to talk of a ldquo;hoarding of liquidityrdquo; and as credit markets might still be ldquo;searching for a bottomrdquo; these challenging times may not be over just yetThere is therefore renewed interest in how best to manage distressed funds and also how best to http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/513B2081-2EE5-4C76-9F74710C881CDFBB 2008 Absolute return has proved so effective at generating alpha that sustaining performance has become a larger problem for hedge fund managers than attracting investors The continuing growth in assets fuelled mainly by institutional investors is imposing new risks and responsibilities on hedge fund managers That they are largely operational in nature does not mean they matter less than investment strategies asset class expansion or arbitrage opportunities In fact the lagging to keep apace operation http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/1CBCFDEA-EA86-4868-BD4E8189F163EA70 2008 IntroductionIn terms of performance andor redemptions turmoil in the global financial markets has led to media reports painting hedge funds in a negative light Such reports tend to ignore the fact that there are two sides to the hedge fund performance coin ndash; absolute return and conservation of capital In any period of turmoil some losses may be unavoidable as managers close current positions be they in response to margin calls or stoploss triggers and reallocate funds to safer asset classes http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/D66CEC1B-064F-47FC-BB16BA5E73D49DF5 2008 IntroductionThe adequacy of the regulation of short selling in Australia and around the world has prompted much discussion and commentary in the past few months Recently emergency measures have been imposed by the Securities and Exchange Commission SEC in the United States and by the Financial Services Authority FSA in the United Kingdom Even though many would say that the regulatory approach under Australian law and market rules is uniquely onerous and prohibitive in a case before the Federal C http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/51B323FB-7EBB-4D89-B7582F2B2249B0A8 2008 Economic pundits and members of the financial press have painted a doomsday scenario for US real estate Home prices are in decline Housing starts are at multiyear lows and foreclosures have increased while credit has become harder to obtain These tales of woe have led many domestic and international investors to become fearful of investing in US real estateDespite this these problems have been largely isolated in residential real estate Commercial real estate remains strong and continues to offe http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/B332D5BA-3877-4C2B-96CFC8F108BB14DA 2008 The three lsquo;Dsrsquo; currently playing a large role in the STP conundrum in todayrsquo;s fund of funds businesses are: Duplication Data DocumentationThey have a lot to do with the specific technology risks some alternative investment firms are running; addressing the challenges these lsquo;Dsrsquo; pose will help funds of funds immeasurably both in terms of cost savings achieved and in overall operational efficienciesLet us start with Duplication and its surly cousin Error: Both are http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/76F868B7-D2C3-448F-AA717CEFDC63DC79 2008 In the past few years we have seen a dizzying array of trading products and services emerge in global financial markets aimed at reducing the cost of exposure to an asset or group of assets These include contracts for difference CFDs exchange traded funds ETFs spread bets binary options covered warrants micro options swaptions and credit derivatives to name but a few While each product has achieved a degree of success with some finding favour in the mainstream arguably the most successful of the http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/38C85A01-7EB4-4133-B86FD80E9A78F236 2008 The cost of failing to meet your Human Resource obligations can be severe Outsourcing is an increasingly popular way of managing Human Resources HR and can significantly reduce a Companyrsquo;s costs and exposure to riskThe risksWhether you have five employees or five hundred you have a duty to comply with an ever increasing raft of employment legislation and practices Coupled with the need to attract and retain the best people for the job the need to have an effective HR support function has ne http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/900115FF-A939-4740-BC0C3C9F47F18308 2008 As a consequence of the complexity of Hong Kong's disclosure of interests regime local substantial shareholders and global investment houses alike frequently fall foul of its provisions Even robust monitoring and reporting systems can fail to cater for idiosyncrasies of the Hong Kong regime It can be exceedingly difficult for investment managers particularly those in large corporate groups to keep track of total interests and make proper disclosures within the tight deadline Some issues tha http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/61673B4A-7EB4-436E-80A17D108C6F4986 2008 The Spanish funds market has undergone significant changes in recent months with the approval on 2 April 2008 of Order EHA8882008 27 March on financial transactions by undertakings of collective investment institutions involving derivative financial instruments which clarifies certain aspects of the Regulation of Law 352003 4 November the MOUp to the enactment of this new regulation the UCITS Directive was not fully implemented in Spain for the use of derivatives by undertakings of collective in http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/4774E121-AC3A-4274-9B2F20D51DFF38A2 2008 Since the beginning of time ultimate focus has led to ultimate return within a communitySpread yourself too thin and you become the perpetual ldquo;Master of Nothingrdquo; achieving corresponding results as you go Before you dismiss the text out of hand I ask you to rationalise for a second Think back to when you were so positive you could complete unaided the last DIY project or the first few weeks nee years within a new career experience breeds wisdom and repetition forms the key to successSo http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/39735D98-6A1C-4D90-A595DD4118AA38F4 2008 Few can have failed to notice the increased focus and visibility that Financial Services Authority FSA is giving to combating market abuse and insider dealing whether it is in the public announcements of its investigations such as into the recent suspected ldquo;trashing and cashingrdquo; of banking shares or in the warnings in its speeches and publications promising more criminal prosecutions and increased use of its enforcement powersFSA has made it clear that this is a market wide issue and n http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/43D84FFA-8D0D-430A-8C419DC07701036A 2008 The Principality of Monaco is not just a magnet for large yachts millionaires and Formula One fans In order to attract funds and alternative asset managers recent legislative developments have resulted in fundamental changes to the rules governing the management of foreigndomiciled funds from the PrincipalityBackgroundPrior to September 2007 Monegasque law did not permit foreigndomiciled funds to be managed from Monaco The only exception permitted under Law ndeg;1194 was a relatively circuitous http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/E6CA13BC-1A52-4017-8219AEC2C187899E 2008 In the midst of what is one of the most serious financial crises experienced in modern times we take this opportunity to offer thoughts on how the hedge fund industry with it and how it will look in the futureIt is too soon to speculate on when the current financial crisis will end though end it will as have all previous crises There is always a sense of ldquo;paradigmbustingrdquo; during times like these and certainly the financial world is pervaded by a sense of instability and a lack of confi http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/749EAE75-18BC-49C5-8F84448817F9285A 2008 Since the summer of 2007 the financial services sector has been severely affected by one of the biggest crises ever to hit the sector the well renowned credit crisis Thus far banks have predominantly been impacted by the credit crunch and have suffered significant losses The fund management industry has also felt the dramatic effects of the crisis This recently published report is based upon a survey of 333 senior executives from across the global fund management community and investigates the c http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/FF9939BB-0132-4868-B00E2F97BF3A2659 2008 The credit crunch started in midyear 2007 bringing with it totally dysfunctional markets which have now lasted well over one year At the time I was planning this article I thought the situation would have stabilised and although I would be writing about a very different market scenario it would be one with clear signposts and a sense of direction As it is I am writing this as the tempest rages about us with the future of the whole banking system both domestic and international under serious thre Operational Risk 2008 Hedge fund managers HFMs should expect to be more candid about their operational failings and losses Faced with public and political criticism the alternatives sector will increasingly be expected to demonstrate how it is keeping its house in orderInstitutional investors particularly pension and fund of funds managers have raised awareness of operational risk management and its evidencing through manager due diligence The industry has responded with the Hedge Fund Standards Boardrsquo;s HFSB sta FIN48 2008 The US Financial Accounting Standards Board FASB has drawn a thin silver lining for certain nonpublic companies around the stormclouds gathering during the early part of October 2008; a further deferral of the effective date of implementation of FASB Interpretation 48 FIN48 by private passthrough1 and non passthrough companies alikePublic companies and their subsidiaries that prepare their accounts under US GAAP were required to apply FIN48 for accounting periods starting after 15 December 2006 http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/6D6BBEDB-912F-49B4-A8EB5ABF4203F323 2008 How much are you willing to pay for your portfolio stocksrsquo; liquidity How do you justify your investment in illiquid stocks Is it cheap enough or is it just another ldquo;Liquidity Value Traprdquo; cheap because of illiquidityPortfolio liquidity is an important risk factor for portfolio management The ability to ldquo;get outrdquo; ie liquidate significantly affects the net selling proceeds and portfolio returnThe liquidity issue is greatly exacerbated as the global credit crisis worsens Inv http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/EF8E90BD-D928-4FAC-A07E3A20F7B158BE 2008 SummaryHedge fund managers have a unique range of requirements that require extensive utilisation of mobile communications This reliance has however created a growing blind spot of risk management issues that not only affect trade but also fuel the regulatory media and investor concerns about the industryCurrent Climate and IssuesDuring the course of the deepening global financial crisis the hedge fund business has fallen under the spotlight of the media financial regulators and consequently inv http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/90B7A723-0622-4F08-98D8140F6E1B9B8D 2008 The environmental space is thematic rather than strategic which can leave those investigating the theme for the first time often scratching their heads and wondering whether there is indeed such a thing Simply sorting the jargon and tangle through the relatively small yet diverse group of investment vehicles can be extremely time consumingA random sample of misleading terminology which one encounters in the marketplace includes: Social Responsibility SRI Ethical funds Environmental Social and Go http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/565113B3-9BAA-4740-A3AC210BEE4A037E 2008 Whilst investors clearly accept the argument in favour of ldquo;alternativesrdquo; within their portfolios the space has been dominated by hedge funds to the exclusion of others It is small wonder that the term ldquo;hedge fundsrdquo; covers such a wide range of sectors and strategies if the mere nomenclature is a dooropener to the investor market Ships operating in a trillion dollar market for ldquo;genericrdquo;commoditised types only which is both deep liquid transparent and uncorrelated prov http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/F82E3898-6BD4-4B97-A9C83AB212E8FEAE 2008 Turmoil in the financial system has inevitably brought intensified focus on issues of regulation and transparency In that context it is worth looking at the experience of hedge funds who have extended their activities into precisely those areas that entail more demanding regulatory requirements and more extensive disclosure ndash; the use of the listed securities markets as a source of funds for their investment management activities A number of hedge funds have floated separate listed investmen http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/1164993A-61A0-46BD-97B9474A2C13A83A 2008 IntroductionAnyone who ever read a book on portfolio management knows that diversification is a key concept for portfolio managers Theory states that a portfolio with many low correlated assets will be beneficial from a risk perspective compared to one with few or highly correlated assets The reasoning behind this is sound but the value of this concept has been questioned recently following several large market movements where historical correlation patterns have broken down Last year we saw at http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/DF7213D1-8BF1-4B29-8D8584573898A8DF 2008 In the midst of the financial turmoil that might have been the worst since the panic of 1929 we tend to lose a proper perspective of how the crisis evolved Needless to say its direct cause was the unhealthy ballooning of the subprime loans in the US economy However we cannot forget about the undercurrent of the commodity prices that shot up sharply before so many of the large global financial institutions showed obvious signs of distressBehind the financial crisis there appears to have been an a http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/8AD06F65-19AA-4E79-A86A00AC7252D3DA 2008 IntroductionIn the Spring 2008 issue of AIMA Journal we wrote an article on the proposed changes to the UK tax rules on residence and domicile from 6 April 2008 That article was written prior to the Budget on 12 March and in fact there were significant changes between our first article and the regime coming into force In particular the proposed changes to the UK tax treatment of offshore trusts were almost entirely rewritten This was partly at least as a result of extensive lobbying by the tax p http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/E9B2EE9F-7275-4243-992DBCBBC6D42B6D 2008 As widely announced Japanrsquo;s 2008 tax reforms introduced an independent agent exemption into Japanese tax law with effect from 1 April 2008 Reaction to the changes by foreign fund managers with business operations in Japan or those contemplating setup and Japanese fund managers seeking to expand their foreign investor base has been universally positive This article summarises the background to the reform and the guidance subsequently issued by the Financial Services Agency FSABackgroundOn 21 http://www.cass.city.ac.uk/media/stories/resources/the-impact-of-short-sales-restrictions.pdf 2008 http://ssrn.com/abstract=1256283 2008 http://ssrn.com/abstract=1259430 2008 http://ssrn.com/abstract=1237702 2008 http://ssrn.com/abstract=1269376 2008 http://ssrn.com/abstract=1236482 2008 http://ssrn.com/abstract=1267466 2008 http://ssrn.com/abstract=1273920 2008 http://ssrn.com/abstract=1270265 2008 http://ssrn.com/abstract=1286434 2008 http://ssrn.com/abstract=1279870 2008 http://ssrn.com/abstract=1275860 2008 http://ssrn.com/abstract=1282769 2008 http://ssrn.com/abstract=1292896 2008 http://ssrn.com/abstract=1297195 2008 http://ssrn.com/abstract=1297188 2008 http://ssrn.com/abstract=1302062 2008 http://ssrn.com/abstract=1301217 2008 http://ssrn.com/abstract=1294324 2008 http://ssrn.com/abstract=1285589 2008 http://www.westgroup.com/store/product.aspx?product_id=40252681&pfv=True 2007 - 200 http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/FA5D1073-2A32-4BCA-B40675FB470AEFA1 2007 Summary Despite ldquo;betardquo; risk being the dominant source of systematic behavior in the hedge fund industry the greatest source of marketdriven hedge fund blowups is ldquo;alphardquo; risk A significant percent of alpha risk results from hedge fundsrsquo; tendency to be netlong Complex Illiquid and Opaque ldquo;CIOrdquo;1 securities The hedge fund industry does an inadequate job of managing alpha risk What are Alpha and Beta Risk Letrsquo;s first define alpha and beta risk To do that we mu http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/53C9C259-E09A-439A-9ADA09662E3E8359 2007 The hedge fund industry represents approximately USD174 trillion in assets under management as of the second quarter 2007 according to Hedge Fund Research Inc and USD11 trillion in fund of hedge fund assets under management according to industry sources As more hedge fund managers pursue similar trading ideas and strategies astute managers continue to identify new investment opportunities that will increase their ability to produce additional alpha and distinguish themselves from their peers The http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/6D61A0AA-BB75-401B-BD5806569862EA72 2007 A good property investor knows that the three most important factors when investing are location location and location This adage can just as appropriately be applied in general to the hedge fund industry and the Asian hedge fund space specifically With the vast majority of hedge fund capital based in the US or Europe the problem of location for Asiabased fund managers becomes much more critical than just the occasional case of jet lag or staying up late for a conference call with time zone chal http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/3EDAD999-6E70-457D-AB475D32AC57B84B 2007 There is often a misunderstanding as to which forms of liability insurances cover which type of claim As one leading law firm observes ldquo;it is possible to buy both professional indemnity insurance and directors and officers liability insurance separately and on an lsquo;off the shelfrsquo; basisrdquo; The danger with this approach is that when a claim or investigation hits you may find insurers arguing among themselves as to which if either of the two policies will respond Indeed it is entir http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/5B151AAD-1253-4873-8DC4595A3230EBDD 2007 The green house gas GHG markets are an emerging and rapidly growing asset class Although these markets are only recently emerging they are developing rapidly and global interest is increasing daily As the start of the Kyoto Protocolrsquo;s first official commitment period is rapidly approaching there are still a handful of uncertainties surrounding these emerging markets Has the European Union EU adjusted its allocation models appropriately to avoid another April 2006 Then the price of emissions http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/8810212C-27A1-4A7A-BF863FAB3002C660 2007 Since the onset of the subprime lending debacle in the United States asset backed securities have gained significant visibility in the public sector The high degree of leverage employed by some managers coupled with marktomarket risk and the revealing of dreadful underwriting standards created the perfect storm for this asset class which we have seen spread into a liquidity crunch which is worse than that of 1998 Regardless of the increased visibility of one subset of the Asset Finance AF univer http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/6B310664-6235-4C6A-8BA1E0D466F2F519 2007 Introduction Many investors consider investing in hedge funds HF because their dynamic investment strategies produce return distributions that often exhibit less downside risk and low correlations with the main traditional asset returns Analysts often proxy the downside risk by looking at the asymmetry of return distribution as measured by the skewness coefficient Recently however some analysts such as Ineichen 2006 give a closer look at the asymmetry of HF returns Among other things they point http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/AF0F255D-F015-4CB0-962C52CC28E2501F 2007 The Financial Instruments and Exchange Law FIEL was passed by Japanrsquo;s Diet in June 2006 superseding the Japanese Securities and Exchange Law SEL the Securities Investment Advisory Law SIAL and several other securities laws on September 30 2007 The FIEL: a Regulates funds including offshore funds that market or issue new interests in Japan from that date b Requires closed funds with Japanese investors to file a regulatory notice regarding their ongoing investment management activities and: c http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/3902AB3C-6A22-42AC-BA93AB14238E5CFE 2007 Introduction As part of the announcements made in the recent preBudget Report HM Revenue amp; Customs HMRC issued an important discussion paper entitled ldquo;Offshore Fundsrdquo; which aims to change key tax rules relevant to such funds from Summer 2008 Current rules relating to offshore funds treat gains made by UK investors holding ldquo;material interestsrdquo; in such funds as income unless the fund can obtain ldquo;distributing fundrdquo; status during the entire period in which the invest http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/0EBC17CE-ADD1-45D9-BF9C202FD03E9265 2007 Introduction The most significant and distinctive feature of the system of regulation of financial products and markets in Australia is that the law allows retail investors to be offered and to invest in any financial product no matter how sophisticated provided of course that there is full compliance with the substantial quot;disclosure documentationquot; regime The appointment of a new Chairman Mr Tony D'Aloisio of the Australian Securities and Investments CommissionASIC together with the http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/C0D3635C-6C11-40D3-8E58486729AB300D 2007 Given the recently issued HMRC guidance on the Investment Manager Exemption IME on 20 July 2007 it is a good opportunity to take a step back and revisit the IME issue from a first principles basis Is it necessary to rely on the IME given the activity performed by an investment manager on behalf of a fund By way of background if a nonresident carries on a trade in the UK through a permanent establishment or branch or agency the profits arising from that trade are prima facie subject to tax in the http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/03181B8C-B449-46A8-8B99A15CEB78A3EA 2007 The recent relaxation in licensing regulations by the Hong Kong Securities and Futures Commission SFC may provide a further boost to the territory's already booming funds industryHedge fund assets under management in Hong Kong now total some US335 billion1 The number of Asian hedge funds has quadrupled to more than 700 since 2002 while assets under management have increased nearly tenfold to US120 billion2However it has been perceived that Hong Kong is a costlier and harder place to establi http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/8826FCA3-4265-4736-8CAFAC3054ED5D3D 2007 In Spain a new onshore hedge fund regulation went into effect in May 2006 allowing managers to prepare to launch new onshore products An update to this regulation Real Decreto 3622007 published on 17 March 2007 includes the final text needed to officially launch and market new productsThe Spanish asset management market is small when compared with others in Europe; ninetyfive companies manage euro;262 billion of assets equivalent to 25 percent of the French market The most popular investment veh http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/E0A52191-29EB-4607-BC72B1E41EB42367 2007 Introduction One of the key features that distinguish hedge funds from other portfolio management vehicles is the fee they charge their investors on returns generated In addition to a management fee 1 to 2 percent levied on assets hedge fund managers also retain a portion usually 20 percent of the profits generated for a certain period commonly referred to as performance or incentive fees As the latter name suggests the rationale behind this ldquo;220rdquo; fee structure is to provide a signific http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/582F8105-C82D-40A8-A1DAA47CAE1C5C14 2007 Hedge funds ndash; under the spotlight Over the past five years assets in the global hedge fund industry have grown rapidly from US550 billion to over US2 trillion and hedge funds have become ldquo;mainstreamrdquo; For a multitude of reasons hardly a day goes past without the industry finding itself front page news: Shareholder activism; M and A activity; listing of permanent capital vehicles and management companies; record asset inflows; a few highprofile implosions; mouthwatering manager earn http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/EE9827F3-01F2-48F8-A58C9CEF268B7C57 2007 A gatekeeper can be defined as anyone who is responsible for selecting screening and eventually allocating capital on behalf of others For the purposes of this article when we speak about the role of the gatekeeper we are referring to the hedge fund and fund of funds universe We are in the position of both gatekeeper and ldquo;gate knockerrdquo; as we are always screening potential hedge fund investments while simultaneously attempting to work through various gatekeepers who provide investment a http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/9474E4E1-381C-4F3B-80BAD51A5925BC49 2007 Perhaps with the exception of the words ldquo;hedge fundsrdquo; themselves there are probably few descriptors in the alternative investments space that have so many meanings and misunderstandings as the words ldquo;hedge fund seedingrdquo; They may cover a myriad of transactions investment approaches and transactional philosophies They may also contain a number of myths and hearsay about dark secrets and opaque transactions Of course they do though I thought it would be quite nice to set the re http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/7157A827-A7A4-4FAD-816FBF9C97E2FBF8 2007 Introduction The objective of this paper is to show how hedge funds can play a role in the assetliability management of a Dutch pension fund PF taking into account the regulatory framework of the new FTK Recent market turbulence has drawn attention to the risk management practices of defined benefit pension plans and has increased the focus on assetliability management Underfunded pension plans are desperately seeking new asset classes or investment styles that would offer equitylike returns wit http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/1C75AEC3-8652-4D6F-B2C3C31D869FBDAC 2007 Global investors seem to have a thing about Russia They seem to expect that a country 15 years old and where memories of the Soviet communist system are only too vivid should behave like a Western European country and operate to the same standards Too often the phrase ldquo;Russia riskrdquo; is quoted as a reason not to consider investing in the region On closer examination many of these purported risks turn out to be a garbled legacy of memories from the 1990s or just the normal risks one might http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/7A9CD3AB-1DE1-4EC0-AC30CF8409F6FE6E 2007 It is a challenging task to express views on market complacency Over the past half a century the foundations of finance theory have been built on the concept of ldquo;efficient marketsrdquo; with market prices being the reflection of the collective information on the prospective returns of financial assets Yet despite academic orthodoxy markets reflect not only the fair value of risk premiums for financial assets at any point in time but also the behavioural inclinations of market participants I http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/7BF0EF4A-D308-4A3A-963EB89870EC396B 2007 Many Chinese enterprises have issued different share classes to raise capital for expansion namely the A shares B shares H shares and ADRs These different share classes are traded in different markets and in different currencies eg Chinese Mainland Hong Kong and America Even though the different share classes represent equal ownership in the same company the prices for such are quite variable Historically many Hong Kong listed shares have traded at more than 40 percent discount to A shares Pract http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/EB00EDF5-51A3-4C46-A426B41E62151696 2007 Japan is home to the second largest economy and the second largest capital market on the planet If we consider one billion US dollars of equity turnover to be a unit of trade opportunity for a hedge fund it is the most attractive place for hedge funds to trade because there are far fewer hedge funds per unit of opportunity compared to the US and Europe Japan has about one third of the number of hedge funds trading in its markets as the US and UK on a relative basis Fewer hedge funds mean less co http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/D79A3F29-5026-4968-9F55A48E90AA621C 2007 In December 2006 the US Securities and Exchange Commission the SEC proposed i new antifraud rules for investment advisers and ii a new standard for the definition of accredited investors The SEC released these two newly proposed rules to the public for comments The deadline for the public to submit comments on those two rules ended on 9 March 2007 The 600 comment letters sent to the SEC represent an extraordinarily high number for such technical issues and is a further indication that hedge fund http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/DD4684B0-879E-4A2D-9CC052076D0F8E62 2007 The Investment Manager Exemption IME ensures that under certain circumstances an offshore fund engaging a UK investment manager does not become taxable in the UK through the actions of the manager As such it is a cornerstone of the tax regime for UK investment managers and is a key to the continuing presence of fund managers in the UKRevenue and Customs HMRC have recently revised Statement of Practice 101 SP 101 which provides guidelines on how they intend in practice to apply the IME The new SP http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/6F33274D-63D9-46EC-B86E6C8D8655C131 2007 Fund managers in the United States owe a duty to their investors to obtain information about the companies in which they invest and to use that information to make the best investment decisions In the course of information seeking managers may come across information not available to the general investing public Such a manager is faced with a dilemma Is he prevented from trading due to the laws which prohibit trading on the basis of inside information or is he permitted even obligated to use suc http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/2D04E365-F9DF-48D1-8A0A62A9E07A8D9E 2007 Promoters of investment funds may choose between a number of internationally recognised offshore jurisdictions The Cayman Islands is the jurisdiction of choice for many sponsors and is often favoured when prospective investors are based in the United States Due to time zone efficiencies Jersey or Guernsey may be preferred when the target investors are based in Europe This article provides an overview of the regulatory systems in these jurisdictions The Cayman Islands 2006 was another record year http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/E264150D-14E2-41C0-AD3E51E1DD9DBABF 2007 The UK Financial Services Authority FSA has been for the most part entirely reasonable in its approach to the hedge fund industry To its great credit it has not responded precipitously to the strident voices calling for harsh regulation of hedge funds which are based more on prejudice than hard evidence So when the regulator invokes the Challenger space shuttle disaster as a warning it would probably pay to sit up and pay attention The somewhat dramatic warning was sounded in relation to the imp http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/F61D72A1-BF6E-482A-9F67A9C37B29F4A4 2007 Given the multilayered investment structure of a fund of hedge funds FOHF liquidity risk enters the picture at three levels underlying securities underlying hedge funds and the FOHF itself While it is natural to expect some variation recent changes in the industry have led to misalignments in liquidity risk and these could have severe consequences for investors if not properly managed Liquidity: a shrinking pool A hedge fundrsquo;s liquidity constraints are driven by two key factors the liquid http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/E261F170-C51E-4C66-9962CB734763F1E0 2007 1 Introduction Investing in hedge funds and CTAs used to be compared to investing in a black box The ongoing institutionalisation has effectively changed the hedge fund industry in recent years An ever increasing number of hedge funds show some portfolio transparency to their investors with respect to risk exposure and some even offer complete transparency Managed accounts stem from the investorsrsquo; need to weaken such characteristics of hedge funds as illiquidity lacking regulation and nontr http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/3A1F07FE-DEB8-4EAC-A6EB657118879F69 2007 Deal by deal activist shareholders are remaking the corporate landscape the Mamp;A space and proxy battles Behind virtually every such deal a hedge fund manager is either leading the charge or trying to muscle in on the deal Hedge funds and their cousins in private equity and even traditional longonly managers are stepping to the plate backed by larger pools of capital and no apparent limits on the size or complexity of the deals attempted Knowing full well the importance of the media and public http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/7E5B9C73-BE3A-4B09-A3CFFE2041142EE5 2007 Risk in its broadest sense is the measure of our collective quot;true fearquot; ndash; an amalgam of rational doubts irrational fears and biases from our own experience1 Risk is currently a hot topic in the hedge fund industry and elicits confused and contradictory responses As the industry continues its growth and the occasional highprofile blow up occurs increasing fear of risk translates into demand for more stringent oversight and control On the other hand the global rout in February when im http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/78996D4D-30BD-4F67-B71F0810EE3999B1 2007 The case for hedge funds is a strong one Many investors including increasing numbers of institutional investors have opted for hedge funds as a diversification element in their traditional portfolios The upside of broader mandates strategy diversification risk reduction Downside protection and yield enhancement offered by hedge funds has been too attractive to ignore Research has shown that the appropriate addition of a hedge fund component increases the Sharpe ratio of a fund; that is it increa http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/2A9AC51C-ECE3-4CD9-B4742E0FE2C8D3D1 2007 Experience shows that few fund managers can beat the markets year on year During the period 1997 to date only a quarter of investment funds were able to return more than the compound cost of borrowing for investment at a rate of 5 Current fee structures encourage risk taking or in the extreme actual cheating or outright fraud Mortality rates in the hedge fund population are high and managers face a daily battle to retain investor funds The rise in popularity of hedge funds continues and some hav http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/119E9416-86F1-4A88-BA90CC93F4B260C4 2007 Australia has a mandatory retirement savings policy which is generating significant institutional demand for alternative asset classes mdash; in combination it is not surprising that the quot;lucky countryquot; as it is known down under has become a focus for hedge fund managers the world overDue partly to this increase in appetite the national hedge fund sector has grown exponentially in recent years to reach around US31 billion in assets under management or US47 billion if you factor in funds http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/6441150F-31AF-4E74-B793EB285F12D75D 2007 The discussion on alpha versus beta in the breakdown of investment returns is as old as the capital asset pricing model which defined these terms about 40 years ago The discussion has finally reached the hedge fund industry Academic research and investors alike have begun to realise that also for hedge funds the ldquo;search of alphardquo; must begin with the ldquo;understanding of betardquo; the latter constituting an important ndash; if not the most important source of their returns The beaut http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/C8412401-CB2A-4564-8D71C7DEE80EC0E9 2007 Introduction The Russian bear has seen a long bull run in the equity market with the RDXxt US Index increasing by more 530 percent since 2003 With a market capitalisation of over US one trillion Russia has evolved into an important global equity market This performance has again attracted investors from abroad who left the Russian market after the 1998 crisis However or because of this the equity derivatives market is not that developed One reason is that the legal framework in Russia classifies http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/D43FB486-ADA8-4B46-ADB95ED83E7ADD66 2007 There is no surer sign that emerging markets like India Brazil and China are coming of age than the increasing interest of international hedge funds in these markets In the longrun most are expected to deliver capital gains dwarfing those of more developed economies In fact if we track the MSCI indices of these countries we see that these markets have begun significantly outperforming the US markets for over 5 years now Graph 1 Figure 1: Performance of MSCI Country IndicesSource: Bloomberg April http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/7E81EC1D-6CB8-4FFF-9C5D539C37993E5E 2007 Introduction Commentators on the alternative and traditional asset management industries are predicting an explosion in the demand for socalled 13030 funds in the coming months and years So what are they and what opportunities and threats do they present Will these products provide the impetus for investors who were hitherto not invested in alternatives to begin to make significant allocations to hedge fund type strategies Could these products eventually prove to be a substitute for hedge funds http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/208F26C8-CD50-4D54-874A221CA68B55A2 2007 Introduction The implementation of the Financial Instruments and Exchange Law FIEL is fast approaching The new law must come into effect by 13 December 2007 However it is understood that the law may come into effect as early as the third quarter this year Accordingly it is an appropriate time to take a closer look at some of the provisions of FIEL In particular some of the changes it will bring to the registration requirements for regulated businesses Registration Requirements It is now commonly http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/4CFD37BA-ED30-4523-855E903A642CC4CD 2007 Introduction In February 2007 a new regime for the authorisation of Qualifying Investor Funds QIFs with the Irish Financial Services Regulatory Authority was introduced to facilitate the nextday authorisations of QIFs This is seen as a significant and welcome development for the Irish investment funds industry likely to attract promoters of a wide range of investment funds to Ireland The new regime and revised product parameters for the QIF are examined below Fund Structures In Ireland outside t http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/4AA6A3F5-61AF-45D5-89C329ECA42EF003 2007 Introduction Bermuda has recently approved a new regulatory regime for its investment funds industry in the form of the Investment Funds Act 2006 the Act The Act was approved in December 2006 but came into force on 7 March 2007 and replaced the regime established under The Bermuda Monetary Authority Collective Investment Scheme Classification Regulations 1998 the Regulations The Act has been welcomed by the industry It deals with the authorisation and regulation of investment funds by Bermudarsq http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/C44DA75C-84F8-41FD-A8FF2B7C4B30E53B 2007 On February 20 2007 the securities regulators in each of the provinces and territories in Canada published new draft legislation entitled National Instrument 31103 Registration Requirements The proposed legislation which is intended to harmonise streamline and modernise the regulation of securities dealers advisers and investment funds in Canada contains sweeping changes to the current regime The new legislation will impact both Canadian and nonCanadian businesses who raise capital or deal in se http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/CB4BBCAA-0FBB-4901-9DFC25F4FAF667EB 2007 Permanent Capital Vehicles are best understood when stripped to their bare essentialsThey attract investment capital which cannot be returned to investors except in certain corporate situations such as share buybacks or liquidation PCVs are not new eg UK Investment Trusts are typically issuers of ldquo;permanentrdquo; capital Real estate funds have often been structured as PCVs such as the socalled REITpetites However recent interest has centred on their use by alternative asset managers to tap http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/0A4127BA-6E9A-4F83-B4B4C3614E7C5F85 2007 The year 2006 turned out to be another actionpacked time for hedge funds dominated from a news perspective by the highprofile blowup of Amaranth Advisors but ending with robust performance overall ndash; and a further robust increase in industry assets The latter part of the year and the first few weeks of 2007 also brought a flurry of activity ndash; spanning acquisitions buyouts IPOs and fund flotations ndash; signalling what looks like a dramatic acceleration in the reshaping of both the hedg http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/F42989DE-3CA0-400B-AAC58DA7BDD6C3C4 2007 The drumbeat of people calling for the demise of the hedge fund industry continues to pound with greater consistency and intensity Not a single week passes without someone speculating that hedge funds are the next asset bubble ready to burst or that returns from the hedge fund managers will be lower in the future than they have been in the past Their arguments are premised on the beliefs that the alpha pool is limited and as more players enter the hedge fund space there will be less alpha to go http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/F64DFCF2-ACB2-4B66-A45EFDB4E4CAC6A1 2007 Cashflow into hedge funds has increased dramatically over recent years But many hedge fund managers are still failing to win in client pitches because they cannot properly communicate their investment processes Why Because the hedge fund client base has changed and many managers have not yet understood this change This increased cashflow is coming from institutional investors But institutional investors have responsibilities to their own clients that are different from the traditional hedge fund http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/D7D59A88-3EBB-426C-85913688EE313162 2007 It is common knowledge that the hedge fund industry looks vastly different today than it did ten years ago As with all growing industries and there is little question that the hedge fund industry continues to grow the landscape dynamics are shifting As the nature of hedge funds and their investors has evolved there have been enormous bifurcations in terms of manager size and strategies We categorise todayrsquo;s universe of managers in the following manner: 1 Institution: Established multibillio http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/2A060D5E-49BC-493F-B6438799C13CF5E3 2007 ldquo;Hedge Funds are no longer prepared to leave it down to the sellside bank or Prime Broker to advise what collateral is required and when they want itrdquo; ldquo;Lately almost all Fund Administration proposal requests seem to include requests for collateral managementrdquo; Why exactly is it that collateral management technology deserves a seat at the alternative investment management table lately and just why is collateral management in general pressing so many buttons nowadays in the indu http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/DE22FF35-87B9-4F81-BD3DE2577FEE0A6B 2007 Introduction The current size of global hedge fund assets is estimated at USD15 trillion representing a compound annual growth rate in assets of about 40 over the past five years As the hedge fund industry takes on a more mainstream aspect and caters to a broader investor base the question of redemption frequency the length of time that needs to elapse before an investor in a fund can redeem their assets and its relationship to fund performance is becoming increasingly relevant To this end this http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/698428B6-1995-4ECF-9E0804B579E3BAD0 2007 Hedge funds are here to stay as a growing component in global institutional portfolios according to recent research by The Bank of New York in conjunction with Casey Quirk amp; Associates ndash; but the investor dynamic is changing Five years ago the hedge fund market was dominated by wealthy individuals and a handful of institutions Today however more than 40 percent of hedge fund flows are institutional This is expected to increase 60 percent from todayrsquo;s 360 million to exceed 1 trillion http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/5CDF89B8-779D-46E8-91453BDF44F939D5 2007 Choosing hedge fund managers who invest in their own fund seems like a good idea It is not difficult to believe that managers who invest their own personal wealth in the fund they manage will strive harder to deliver the highest possible returns combined with the lowest possible risk Of course no two investor temperaments are exactly the same and the question of what makes for a high return with a low risk is also a question of temperament and individual horizon The guarantee of achieving the sa http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/7A0255A6-63FA-476B-9C37E4C65F80A9D9 2007 Over the course of the last decade bank lending to hedge funds and hedge fund listed products has increased markedly and steadily A wide range of credit providers now compete to gain exposure to the asset class through a diverse offering of products and financing techniques Ten years after Man Investments entered into its first significant external leverage transactions we take a product providerrsquo;s look at why leverage is typically used how banks approach hedge fund lending and some of the http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/61172B25-C65F-4422-8128483210B33E81 2007 What is quantitative or ldquo;quantrdquo; investing In short it is where mathematical models rather than managerrsquo;s discretion make investment decisions What do quant managers do apart from running sophisticated computer programs An analogy with cars may help here No matter how sophisticated a car it still needs a driver and sometimes a mechanic The driver must know when to brake and when to accelerate Quant managers provide both functions ndash; they control risks as well as fix things such http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/0F4F999B-DAEA-4821-9DB9AE02FCBA6A92 2007 This article is the winner of the 2006 AIMA SingaporeINSEAD Research Award which was sponsored by the Chartered Alternative Investment Analyst CAIA Association Does distance affect hedge fund performance Anecdotal evidence suggests that proximity to investments may be helpful for hedge funds Being nearby allows hedge funds to maintain close contact with senior management Fund managers can learn valuable information from other local firms along the supply chain by being on the ground Nearby funds http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/4ACD6DFA-315D-4F97-BD3DB4A7B68B0813 2007 Introduction Much has been written about modern portfolio theory with the emphasis very much on theory Fund management in all its guises is primarily based on trying to predict the future and optimising returns based on these predictions Put another way the outcome in terms of returns should not surprise the investor though they may of course disappoint Any surprise should simply manifest itself in terms of being outside the expected returns based on the portfolio analysis Such surprises either http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/7CA761E9-501B-4A6A-8467FE9936E23F77 2007 These are all headlines which have appeared in national press and hedge fund publications over the past few months They all refer to the changes in the investment manager exemption IME which were set out in a proposed revised Statement of Practice issued on 20 October 2006 by HM Revenue and Customs HMRC as part of a general consultation This sets out HMRCrsquo;s interpretation of the taxation rules applicable to investment managers and their overseas clients HMRC are considering the responses to http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/7C2A7263-389E-4C8E-8963E4059D1F3D86 2007 Islamic investors have historically been prevented from investing in traditional hedge funds with a longshort equities strategy due to the requirements of Islamic law Sharia Investment managers are adapting classic alternative strategies to satisfy Sharia principles Recently a few fund managers have launched Islamic hedge funds applying longshort strategies A traditional short contract is forbidden by Sharia However alternative techniques are available which allow managers to create Islamic hedg http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/63551E17-2452-4640-BD49FC2A7641F905 2007 Background In November 2006 the Financial Services Authority FSA issued its discussion paper 065 entitled ldquo;FSA confirmation of Industry Guidancerdquo; DP The context under which the DP has been issued is the placing by the FSA of more reliance on the eleven Principles for Businesses and highlevel rules The FSA stated that this approach provides firms with greater flexibility to decide how best to meet its requirements encourage greater innovation and align good regulatory practice with good http://papers.ssrn.com/abstract_id=1015472 2007 http://papers.ssrn.com/abstract_id=958696 2007 http://papers.ssrn.com/abstract_id=773384 2007 http://papers.ssrn.com/abstract_id=1035521 2007 http://papers.ssrn.com/abstract_id=1140824 2007 http://www.investmentuk.org/press/2007/20070731-01.pdf 2007 http://eu.wiley.com/WileyCDA/WileyTitle/productCd-0470042664.html 2007 http://papers.ssrn.com/abstract_id=1014861 2007 http://bookstore.csfi.org.uk/action_260_2006.aspx 2007 http://www.oup.com/us/catalog/general/subject/Finance/Investments/~~/dmlldz11c2EmY2k9OTc4MDE5NTMwNDIxMw== 2007 http://papers.ssrn.com/abstract_id=967830 2007 http://www.booksonbiz.com/estore/index.php?main_page=pubs_product_book_info&cPath=141&products_id=190 2007 http://papers.ssrn.com/abstract_id=1000939 2007 http://papers.ssrn.com/abstract_id=967829 2007 http://papers.ssrn.com/abstract_id=989011 2007 http://papers.ssrn.com/abstract_id=992508 2007 http://papers.ssrn.com/abstract_id=1018663 2007 http://papers.ssrn.com/abstract_id=1003346 2007 http://eu.wiley.com/WileyCDA/WileyTitle/productCd-0471152803.html 2007 http://papers.ssrn.com/abstract_id=1112247 2007 http://papers.ssrn.com/abstract_id=1030400 2007 http://papers.ssrn.com/abstract_id=1108310 2007 http://www.ey.com/global/content.nsf/International/Asset_Management_Global_Hedge_Fund_Survey_Insights_Request_Form 2007 http://www.watsonwyatt.com/europe/pubs/globalinvestment/default.asp 2007 http://www.books.iupindia.org/newarticle.asp?isbn=81-314-0876-0&bookid=IB1101400 2007 http://www.books.iupindia.org/newarticle.asp?isbn=81-314-1207-X&bookid=IB1101476 2007 http://aima.vmnet.pixl8.co.uk/en/knowledge_centre/sound-practices/GuidesSoundPractices.cfm 2007 http://aima.vmnet.pixl8.co.uk/en/knowledge_centre/sound-practices/GuidesSoundPractices.cfm 2007 http://papers.ssrn.com/abstract_id=1030962 2007 http://papers.ssrn.com/abstract_id=974421 2007 http://papers.ssrn.com/abstract_id=1087543 2007 http://papers.ssrn.com/abstract_id=968717 2007 http://papers.ssrn.com/abstract_id=937972 2007 http://www.ifsl.org.uk/upload/CBS_Hedge_Funds_2007.pdf 2007 http://www.euromoneybooks.com/product.asp?PositionID=search&ProductID=5895&Catalog=PLC&results_per_page=10&search=The%20Euromoney%20Hedge%20Funds%20&%20Alternative%20Investments%20Handbook%202006&SearchTypeID=&SearchInterestID= 2007 http://papers.ssrn.com/abstract_id=984450 2007 http://papers.ssrn.com/abstract_id=961828 2007 http://papers.ssrn.com/abstract_id=992739 2007 http://papers.ssrn.com/abstract_id=891621 2007 http://papers.ssrn.com/abstract_id=919881 2007 http://papers.ssrn.com/abstract_id=1015714 2007 http://papers.ssrn.com/abstract_id=995907 2007 http://papers.ssrn.com/abstract_id=939629 2007 http://papers.ssrn.com/abstract_id=989615 2007 http://papers.ssrn.com/abstract_id=924242 2007 http://papers.ssrn.com/abstract_id=1016180 2007 http://papers.ssrn.com/abstract_id=1030288 2007 http://papers.ssrn.com/abstract_id=971831 2007 http://papers.ssrn.com/abstract_id=1019968 2007 http://riskbooks.com/intelligentcommodity 2007 http://papers.ssrn.com/abstract_id=972058 2007 http://www.cpifinancial.net/v2/books.aspx 2007 http://papers.ssrn.com/abstract_id=1029243 2007 http://papers.ssrn.com/abstract_id=884202 2007 http://papers.ssrn.com/abstract_id=885945 2007 http://papers.ssrn.com/abstract_id=958305 2007 http://213.86.34.248/NR/rdonlyres/3E0A703C-7DF6-4AFB-BADD-13CFF1D513F6/0/BC_RS_LPUK200708fullreport.pdf 2007 http://papers.ssrn.com/abstract_id=15108 2007 http://papers.ssrn.com/abstract_id=1017299 2007 http://papers.ssrn.com/abstract_id=934047 2007 http://papers.ssrn.com/abstract_id=968052 2007 http://papers.ssrn.com/abstract_id=988176 2007 http://riskbooks.com/Investor/porfolio-construction.php 2007 http://www.securitization.net/pdf/Deloitte/Precautions_24Jan07.pdf 2007 http://www.edhec-risk.com/site_edhecrisk/public/features/RISKArticle.2007-01-24.1044 2007 http://papers.ssrn.com/abstract_id=1093639 2007 http://papers.ssrn.com/abstract_id=967834 2007 http://riskbooks.com/Operational%20Risk/sec-reg-outside-us.php 2007 http://www.ksda.or.kr/UPLOADFILES/Securities%20Market%20in%20Korea%202007%20(KSDA).pdf 2007 http://papers.ssrn.com/abstract_id=875635 2007 http://papers.ssrn.com/abstract_id=985547 2007 http://www.tilburguniversity.nl/tilec/meetings/afm/13-02-07/vermeulen.pdf 2007 http://papers.ssrn.com/abstract_id=987558 2007 http://www.managedfunds.org/downloads/Sound%20Practices%202007.pdf 2007 http://www.kpmg.com/Industries/FS/Other/SIMI2007.htm 2007 http://papers.ssrn.com/abstract_id=1015420 2007 http://papers.ssrn.com/abstract_id=1031096 2007 http://riskbooks.com/Executive%20Reports/operational-risk-managers-guide2.php 2007 http://papers.ssrn.com/abstract_id=967833 2007 http://papers.ssrn.com/abstract_id=967832 2007 http://faculty-research.edhec.com/74012297/1/fiche___pagelibre/ 2007 http://papers.ssrn.com/abstract_id=989608 2007 http://www.pearsoned.co.uk/Bookshop/detail.asp?item=100000000246764 2007 http://papers.ssrn.com/abstract_id=971018 2007 http://papers.ssrn.com/abstract_id=967988 2007 http://papers.ssrn.com/abstract_id=989612 2007 http://eu.wiley.com/WileyCDA/WileyTitle/productCd-0470062053.html 2007 http://db.riskwaters.com/public/showPage.html?page=books_search_results 2006/2007 http://www.aima-australia.org/forms/HedgeFundIndustryAust2006-07.pdf 2006-2007 http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/65E1A3C8-C976-4CB3-845C789FC539C7D8 2006 For his Statue of David in 1501 Michelangelo used a single block of marble In fact it was a block that had been started upon but abandoned by another lesser talent years earlier At the time everyone thought that this block of marble was ruined that its potential had been exhausted and that nothing further could be extracted from it But Michelangelo took on this discarded block and from it he created one of the masterpieces of all timesFor Michelangelo to sculpt meant to take away not to add bec http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/4DB460C0-2ACB-4B3A-B1C32111C4377F25 2006 Much of the Alpha controversy exists because Alpha leads a double life It does an honest job as a concept a convenient label for part of what investors are seeking from their alternative investments However it is also used as a statistic ndash; something for which we can estimate given some historic data with the implicit hope that this historic value relates to both the underlying concept and to future values On paper the process looks simple; just perform a regression in which fund performanc http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/B88265BD-6133-4EA4-9D0E71D12C9C4769 2006 When it comes to family wealth what is the secret to success Why do some families achieve longterm generational success while others do not For over 16 years Family Office Exchange FOX has worked intimately with private families and has sought to answer these questions Our findings demonstrate that as with most things in life long term wealth and healthy intrafamily relations are rarely matters of luck Rather they are the results of planning communicating and following through to set and reach f http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/68192471-773E-48A6-A9B0BD4977995F56 2006 Demand in Europe for hedge fund exposure shows no sign of relenting led by strong institutional asset flows A clear division is emerging between those managers with a business model firmly founded on servicing the assets of highnet worth private clients and those firms targeting this rapidly growing institutional sector Regulation is going to have the single biggest influence on shaping the future of the hedge fund industry Firms seeking to develop business with institutional investors believe i http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/482C17D1-DE87-4DA2-A69B1A1229F79D52 2006 Fund supermarkets in the mutual fund world have revolutionised the way wealth managers can aggregate client investments on a single platform and as a result substantially reduced back office costs The concept of Straight Through Process STP is now regarded as a standard service provision for the vast majority of cost conscience wealth managers In the hedge fund industry the hedge funds are beneficiaries of the investments in STP by brokerage firms exchanges and large asset management firms These http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/86A263C2-B823-4A56-91FBC5C3483DC811 2006 Hedge Funds HFs are different from standard investment vehicles because their behaviour is considered as asymmetric in terms of relative performance to traditional stock or bond indices The goal of most HF managers is to capture positive returns in bull markets and avoid negative returns in bear markets This asymmetric pattern warrants us to consider HFs as important and revolutionary vehicles in the asset class universe But how does one investigate the return asymmetry Many academic papers have http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/B0E3E483-5861-4B1B-B4D510147733C3EA 2006 Figure 1: Key official shortterm interest ratesIntroduction In this article we look at one aspect of the fixed income universe ndash; the sovereign debt market and two aspects of that universe Firstly we analyse the likely future direction of policy rates in four major markets ie the United States Japan the Eurozone and the United Kingdom Secondly we assess what Alan Greenspan called the rdquo;conundrumrdquo; of low longterm interest rates As we can note from the above chart the current tighetni http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/FE3ECDDD-542B-4E58-B7799E4F3019DB41 2006 In the past even if spot commodity prices declined a commodity futures investor could still have a positive statistical expectation of profit and that has been through the ldquo;roll yieldrdquo; embedded in certain commodity futures contracts When a nearmonth futures contract is trading at a premium to more distant contracts we say that a commodity futures curve is in ldquo;backwardationrdquo; Conversely when a nearmonth contract is trading at a discount to more distant contracts we say that the http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/5C3BD37B-39DF-4C14-A7CDC0EC51CE21F6 2006 Introduction and market overview Recent surveys of the credit derivatives market by ISDA and the British Bankers Association BBA suggest that outstanding transactions are now above US 20 trillion This exceeds even the most optimistic forecasts made by informed market commentators Part of this performance can be attributed to the same market drivers that year on year have contributed to the marketrsquo;s exponential growth: bull; the inefficiencies of the credit markets; bull; the need for banks http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/EBBB4E98-E64B-4EEB-9F34871B77AFAB5B 2006 Introduction In todayrsquo;s market there is a wide range of Fund of Funds FoF competing for investorsrsquo; capital Many investors are concerned about directional exposure to underlying markets when making a FoF investment decision To make a comprehensive investment decision an investor should evaluate the historical performance to assess what underlying exposures the FoF has and whether it fits into the existing portfolio Using a multifactor model approach can shed some light on what the main http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/9A31F0F0-BB41-4481-B80FE0A38687E235 2006 Introduction Over the last couple of years shareholder activism has become a hot topic in the Netherlands During recent months there have been even further developments Shareholder activism includes various actions initiated by shareholders towards listed companies usually because they are dissatisfied with certain decisions or the strategy followed by the company and they believe shareholder value can be increased Recent examples include Versatel CSM VNU Stork ASMI and Ahold Examples for the ne http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/BFC8F9C1-BCCA-4341-B94CAAC1DEEB20B3 2006 In 2002 the Peoplersquo;s Republic of China PRC government granted foreign institutions full access to Chinarsquo;s capital markets through the QFII scheme Since then it has brought hope and excitement to foreign fund managers insurance companies securities companies etc which are eligible to apply for approval as a QFII in China As of September 2006 the PRC authorities have approved 50 QFIIs with a total investment volume of US 8billion Typically QFIIs are allowed to invest in the Renminbidenom http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/5D5B2DAF-FC89-427B-964608BBA18502D1 2006 Why would a number of hedge fund managers be asking about potential product opportunities offered by UCITS1III A UCITS III fund is specifically designed for panEuropean distribution to retail investors and has quite onerous investment restrictions which most hedge fund managers would find hard to live with However one of the many benefits of the product is that you get regulatory approval to establish such a fund in one European Union EU member state such as Ireland or Luxembourg You can market http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/7D593EBA-AFF1-4E5D-9C9F2A88504C5C94 2006 Luxembourg is about to adopt a new investment vehicle in replacement of the existing institutional fund This new vehicle will offer greater flexibility in terms of corporate structure and a lighter prudential regime Besides the scope of eligible investors will be widened so as to cover not only institutional investors but also other types of wellinformed investors including sophisticated private investors On 5 October 2006 the Luxembourg government deposited with Parliament a bill on specialised http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/F0A4D6B3-4AAA-455F-955AB41338470275 2006 Everyone knows that it is important to plan for disasters The very useful site wwwlondonpreparedgovuk fires out statistics: ldquo;Eighty percent of businesses affected by a major incident close within 18 months; 90 of businesses that lose data from a disaster are forced to shut within 2 years; 58 of UK organisations were disrupted by September 11th and one in eight was seriously affectedrdquo; Interviews of local businessmen following the UKrsquo;s Buncefield oil depot fire illustrated how catas http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/4483E7AE-E030-4CE8-9BCB1175670925D1 2006 Analysts estimate that there are over 250 hedge funds that trade commodities Unparalleled volatility and trading volume make commodity markets attractive to professional traders However commodity markets also present unique risk management and operational risk challenges Failure to address these challenges could result in significant losses of investor capital Summary and key observations The purpose of this study is threefold: firstly to provide a glimpse into how leading commodity hedge funds http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/817A0395-926D-43C9-B91156AF3946BA57 2006 When it comes to the business of running a hedge fund sound practices do matter and are being broadly implemented by fund managers across a wide variety of investment and operational realms These findings emerge from a recent survey of alternative investment professionals conducted by Horizon Cash Management Backgroundmethodology This survey conducted online via an independent market research firm The Guild Group an Austin TXbased company that specialises in online surveys was fielded in AprilMa http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/CDAC23C9-9F4B-4622-88D2268D79AFC4B6 2006 Much has been written about the growing importance of proper corporate governance practices in the alternative investment industry and the importance of directors properly discharging their fiduciary duties to fund investors Comparatively little consideration has been given to the role that a fundrsquo;s corporate secretary plays in effectively implementing those corporate governance policies for the benefit of the fund and its directors The expertise and specific industry experience of the corp http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/EEB25D21-C625-4242-A5CA29556ADA3CBF 2006 Hedge fund managers have long been aware of the need for investors to conduct thorough due diligence when assessing the merits of their investment strategy Over the past few years there has been an increasing focus on operational due diligence due to the increasing inflows of institutional capital into hedge funds and some wellpublicised fraud cases that have caused losses even for some of the most sophisticated investors in the industry Regulators are also focusing their attention on hedge fund http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/91EEB3A0-B3CA-45FA-B8644A5CC16BE6C4 2006 This study aims to better understand what drives the returns of the lsquo;classicrsquo; hedge fund style: equity market neutral strategies If such strategies are able to exploit market inefficiencies then these strategies should provide significant outperformance after adjusting for risk Measures of market beta should not be significantly different from zero Similarly any other betas relative to various lsquo;exposuresrsquo; or factors should not be significantly different from zero In order to http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/C365A4D2-490E-437E-82FBB258BEF11D7D 2006 The UK Financial Services Authority FSA has made it very clear that it is committed to taking firm action against market abuse Hedge funds now under increased scrutiny by the FSA should be particularly alert to this Hector Sants the FSA's Wholesale and Institutional Markets Managing Director has said that the FSA will ldquo;carry out proactive surveillance rather than simply waiting for cases to be reported to us by exchanges or other market participantsrdquo; and that already this year it http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/B8AD4581-ECCA-48D4-80184808E0D7D863 2006 Introduction In June 2006 the Financial Instruments and Exchange Law of Japan quot;FIELquot; submitted by the Financial Services Agency quot;FSAquot; to the Japanese legislature the Diet was enacted and will take effect during 2007FIEL represents a significant change to the financial regulatory regime in Japan unifying existing concepts to provide a more comprehensive and uniform regulatory regime for financial products and services generally as well as expanding the regime to cover new products http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/112FD6EF-3F65-4523-AE730F61FDD0AB71 2006 Introduction After what some saw as a slight lsquo;breatherrsquo; during 2005 the pace of regulatory reform in Australia has redoubled during 2006 Many of the reforms will have farreaching implications for all areas of the financial services industry and the reforms outlined in this article will impact directly on hedge funds and hedge fund participants who have relevant connections with Australia Scope of this article We shall outline changes in the following areas: bull; AntiMoney Laundering a http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/990FFFE4-D5A5-455D-994CDB27527841DD 2006 For almost 20 years those acting as investment advisers for UK authorised firms have had to pass tests on basic regulatory and technical knowledge These exams such as the Securities amp; Investment Institutersquo;s Certificate contain questions such as these: Answers are at the end of the article 1 A customer asks what exercise style LIFFE Euronext UK stock options have Your reply would be: A European B American C All American except FTSE 100 D American and European 2Under which ONE of the follo http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/CEAEBFEF-1605-410B-B31571B4534475AB 2006 Late last year AIMA and senior hedge fund industry figures decided that commonly held external misperceptions about the hedge fund industry needed to be addressedThe rationale is thus: Because of the enormous yearonyear growth of the industry in 1990 there were 530 hedge funds worldwide there are now close to 10000 the media will be unrelenting in its coverage of hedge funds Avoiding the press is not viable Instead the industry must learn how to manage it optimallyA smart move Seldom has the p http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/D6CB447A-A5BC-425D-9015730A5578D17D 2006 I am a firm believer in the theory that it would be nearly impossible to identify a wellorchestrated fraudulent hedge fund scheme in time to prevent the fraud That said most of the recently reported hedge fund frauds have been far from wellorchestrated In many cases the most basic level of due diligence would have exposed these investments as being unsuitable or at the very least questionable I have always been willing to walk away from a hedge fund manager with the potential for high returns if http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/0AFF2F8F-F45A-476D-88B041B6F8670213 2006 Alternative investments have steadily gained broader appeal among institutional investors reaching far beyond the domain of US foundations and endowments which constituted the early adopters of these strategies All signs indicate that this will continue for the foreseeable future The rationale behind the success of alternative investments is investor satisfaction According to the results of a recent study conducted by State Street Corporation in conjunction with the 2005 Global Absolute Return C http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/1F1E7AC9-CEB5-483D-92CF36F5CB27AD49 2006 With all of the merger talk these days SBC Communications and ATamp;T Merck and Schering to name just a few a noteworthy merger is taking place in the alternative investment industry that could change the face of alternative investing and capital markets for years to come Often called lsquo;convergencersquo; this merger is a blending of the hedge fund investment model with the private equity investment model and is being driven by the dynamic changes taking place in the hedge fund industry Cur http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/C97CF30F-B98B-4972-B5E66D08E500AA19 2006 In what follows we suggest a way to estimate hedge fund market risk in the absence of full portfolio information The method starts with a typical exposure profile available from a fund manager and then makes a range of general but reasonable assumptions regarding individual instruments and their interactions within the fund portfolio The method estimates fund volatility by capturing the two main contributions to the latter: pure market beta risk and idiosyncratic risk of individual stocks exacer http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/C8D43AEB-C79F-4293-9211E9E06B63E844 2006 Hedge fund performance track records have the ability to hide a multitude of sins where risk analysis and potential worstcase losses are concerned In this article we consider the use of factorbased models to provide a more realistic understanding of potential risks In contrast to longonly fund management where investment strategies are often tethered to benchmarks and usually employ linear trading strategies hedge funds can invest in a vast range of opportunity sets through a wide array of instr http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/55EA6AB6-6113-414F-90570B50C91D902B 2006 The restrictions imposed by Sharia have meant that Islamic investors have faced a limited number of asset classes that they have been permitted to invest in Most of the permissible assets property venture capital etc have been at the riskier end of the spectrum However the majority of Islamic investors have been risk averse for a number of reasons including assetliability matching and innate conservatismAs a consequence a very high proportion of Islamic money is held in Murabaha based money mark http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/2D858755-DA47-4EE3-9C934F91B59617B5 2006 The Russian market has been growing and expanding rapidly over the last years Valuations have risen and liquidity has much improved The free float probably now exceeds 175 billion and combined daily turnover often exceeds 3billion As equities are testing new highs and yields and spreads are at record lows the scope of products in the Russian market is also expanding very fast Volumes in Russiarsquo;s derivatives market are picking up exponentially both in the listed and OTC segments Most of the http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/8C816D14-C93A-415A-8C4E7367D98B9A5F 2006 Recent studies suggest that substantial amounts of money are likely to continue to pour into alternative investments However the source of the capital inflows appears to be shifting rapidly Previously wealthy individuals were the main source of new funds Now funding is increasingly institutional Capital inflows from endowments pension funds and foundations are soon expected to account for up to 50 of the net new money into hedge fundsThe shift in the balance of funding sources is likely to have http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/9B7C52AC-E333-4E9B-A478A2AB47826192 2006 A common approach in categorising hedge funds is for the funds themselves to do the selecting This is largely because no outside party has ongoing access to the portfolio holdings of hedge funds across the entire investment universe In the absence of such systematic information it is understandable that most databases rely on hedge funds to provide their own selfselected categories Such a process raises questions about consistency Do all hedge funds use the same descriptors in similar fashion Or http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/7133CC76-16EB-45ED-BD9D5BAA2E6AFFB5 2006 As one finds in any asset class the foreign exchange world has fostered a variety of distinct styles and strategies This article will attempt to make some sense of the style classes available within the FX realm today More importantly we will also explore what value can be added by understanding the differences among these styles Being armed with a good understanding of a managerrsquo;s style gives the portfolio manager a clear advantage one that can help overcome the drawbacks of optimisation M http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/2C120B34-6265-45EC-BD093C69D50896A0 2006 Gold is on the rise It recently surpassed 645 per ounce an increase of more than 140 from its low of 254 As of mid2005 it has increased approximately 30 in all currencies and is no longer simply reflecting USdollar weakness Media coverage attributes these increases to supply shortfalls geopolitical concerns rising oil prices inflation fears and US financial imbalances The reports typically focus on trading implications since most investors and analysts think of gold as a shortterm speculative tr http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/EEC616BF-A336-40A5-8DD7140783682993 2006 March 1 2006 was a big day for the fund industry fund managers and investors This was the day that the Revenue Profits Tax Exemption for Offshore Funds Bill 2005 the lsquo;New Lawrsquo; was enacted into law The New Law has been long awaited The then Financial Secretary Antony Leung in giving his 200304 Budget Speech openly said that the Government intended to amend the tax legislation to exempt offshore funds from Hong Kong profits tax in early 2003 After three years of waiting the tax legislati http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/15C00C5D-B27A-4859-B5B1242E17CB41A4 2006 There has been a great deal of debate in the United States and England recently as to whether hedge funds should be subject to increased regulation From a Cayman Islands perspective the success of the domicile in attracting hedge funds and the limited number of failures bears testimony to the effectiveness of the current regulatory systemEmphasis is placed on the statutory requirement for full and proper disclosure in the offering document of all information necessary to enable a prospective inv http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/834B3BE1-B2CD-4DBB-8D598D17262452A6 2006 In September 2005 the first international prime broker was appointed in respect of an onshore collective investment scheme in France ndash; an OPCVM Organisme de Placement Collectif des Valeurs Mobiliegrave;res following implementation of Decree No 2005875 of 25 July 2005 The recent development of the French market for onshore hedge funds is supported by the adoption of a new regulatory and legal framework The evolution of this local law regime and its pragmatic implementation by the Autoriteac http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/737FB842-CC06-44FA-826E4AF54DE2D65A 2006 As nonUS fund managers begin to attract US taxable investors they should consider the potential advantages of remaining structured as a single standalone offshore fund rather than following conventional wisdom and restructuring as a masterfeeder structure As this article illustrates there are potential tax benefits to be gained as well as cost considerations Despite growth of potential hedge fund investors globally and the many regulatory requirements of the United States the US hedge fund inves http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/695AD80C-6F73-4C80-9A5FBFD1DCA84C1B 2006 As a foretaste for the potential of UK REITs for investors and asset managers this article briefly outlines the JREIT market in Japan which has grown exponentially over the five years since inception providing a diversified alternative real estate asset class for retail and institutional investors and contributing to the upturn in the Japanese real estate market What are REITs Real Estate Investment Trusts ldquo;REITsrdquo; are investment trusts with real estate as their underlying assets Income http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/EE864409-E7D1-4C95-B06EDCE8ECC14FB1 2006 The US By Sarah Wood Absolute Return The year 2005 will be remembered as a sobering one in the US hedge fund industry After several years during which talented managers seemed to be able to raise more capital than they could run though wordofmouth alone the task suddenly became more arduous and assets at many solid funds actually fell Likewise managers had to work harder than ever to eke out decent returns and most prepared to hang up their hitherto freewheeling ways to become governmentregulate http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/19FC78BF-46A5-4014-A864CB84664D0C1C 2006 The hedge fund industry has grown in size and stature as more and more financial institutions allocate assets to the industry This institutionalisation has coincided with ndash; indeed has helped to develop ndash; an enviable professionalism amongst fund managers and service providers One area where the impact of professional standards and attitudes is apparent is that of independent directors of offshore hedge funds Until relatively recent times independent directors tended to be selected on th http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/F24B672D-EF09-4451-8BD4919044117642 2006 The recent AIMA Study lsquo;Asset pricing and fund valuation practices in the hedge fund industryrsquo; thoroughly addresses critical aspects of the practice of independent pricing of hedge fund portfolios and the diverse challenges it presentsAlthough different issues are associated with independent portfolio valuation for funds of funds the same fundamental practice applies The administrator needs to collect the underlying hedge fund price information independently from the FoF investment mana http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/4E211FB5-FEE2-480C-868576C66BA41EA5 2006 The Italian hedge fund industry continues to grow As of December 31 2005 it reached euro;17 billion in assets under management ndash; an increase of 44 over the end of 2004 when total assets under management were euro;118 billion see Figure 1 Figure 1: Italian hedge funds industry asset growth Data in billion Euro Source: MondoHedge Currently 34 speculative SGR Societagrave; di Gestione del Risparmio or asset management companies dedicated exclusively to hedge funds manage 161 funds compared wit http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/42B12E7F-8092-4206-B516D200CF954BD3 2006 Shorttermism as all but a few dedicated speculators know is the scourge of the investor seeking significant and durable returns To be fair some members of the traditional equity investment community learned this key message a long time ago Speaking in the 1920s for example the notorious stock operator Jesse Livermore commented that: ldquo;It was never my thinking that made me money but my sitting tightquot; Seventy years later the now legendary former head of Fidelityrsquo;s Magellan Fund Peter http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/5F3F9A22-BD5A-4C5C-883184B902775825 2006 Technology tools have much to offer to the alternative investment world whether in mitigating operational risk or creating competitive advantage in trading Fund management companies are spoilt for choice when it comes to software that helps them maximise efficiency but choosing functionality is the easy part More difficult and often not considered until it is too late is the task of choosing tools that already interface with each other and integrating them into a fully efficient work flow plan T http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/86FF5F77-EF00-49F7-A993C62B97BA57A9 2006 Illiquidity is a common feature of alternative investments whether one chooses venture capital private equity or hedge funds For hedge funds the illiquidity can arise from the contracts an investor enters into which may have one year or longer lockups or it can arise from the type of investments that a hedge fund specialises in A hedge fundrsquo;s investments may include overthecounter derivatives instruments which may be difficult to value or smallcapitalisation stocks which may trade infrequen http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/0770BAF9-E00A-4B4A-94B1D586C78CACFE 2006 The Eurekahedge database has now grown to cover more than 200 longonly absolute return funds ARFs that together represent in excess of 27 billion in managed assets Longonly ARFs are a recent addition to the alternative investment landscape and have grown in both size and number over the past few years Their increasing popularity among institutional investors is driving more hedge funds ndash; leveraging on their presence and experience in the equity markets ndash; to launch longonly products Als http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/A6C75C34-375B-498B-A8B4648BA04A83EE 2006 Volumes on the worldrsquo;s futures and options exchanges appear to be slowing down given that across the board the percentage increase in volume is in the low single digits However when one digs deeper it is apparent that some major products continue to see a 1520 volume increase if not more What is driving this volume increase and should the market expect to see continued development At the annual Futures Industry Association Expo in November 2005 Richard Berliand Global Head of Futures and Op http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/9DAFFF84-3C8A-4D2A-A296BEB81D6962F4 2006 Managed futures or CTAs is an alternative investment strategy characterised by its ability to take either long or short positions efficiently in a wide variety of global markets; by historically low correlations to both traditional and other alternative investment strategies; and by the potential to provide portfolio diversificationIn a fully diversified portfolio any allocation to managed futures is determined by their potential for enhancing returns reducing volatility and reducing downside ri http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/5E52C49C-5C2E-4674-AF811B1B355AE3E8 2006 In Australia macroeconomic information announcements occur on approximately 45 of trading days Consequently they may be one of the most important contributors to price adjustment in futures markets This paper reports the results of research which examines 27 different classes of macroeconomic announcements that are made at 1130 am and seeks answers to two questions1 What types of macroeconomic information have the largest impact on futures prices on announcement 2 How long does it take the marke http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/DCD82710-282F-47B9-942361AFB5C6CDB8 2006 Low volatility funds of hedge funds have become more and more popular in the last few years as greater numbers of institutional investors and pension funds enter the alternative asset management environment Indeed in a world of low interest rates institutional portfolio managers have found in this investment area an original way to achieve their assetliability driven management goals Moreover it is important to note that low volatility FoFs are usually set up as principalprotected securities lik http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/392B81B4-10ED-4F0F-8779F3FA0E5675AF 2006 Credit derivatives such as Collateralised Debt Obligations CDOs have become extremely popular as they represent a straightforward vehicle for credit correlation trading Even if an accurate and consensual modeling of credit correlation is still not available Gaussian copula models ndash; also known as market models directly calibrated on single tranche synthetic CDOs implied correlations are of very common use These models provide a very natural framework using correlation matrices and Gaussian http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/571F5CCB-ECF2-4514-8297E86594A846FC 2006 At the same time as the German Investment Act Investmentgesetz InvG was introduced in January 2004 Germany also saw the enactment of the new Investment Tax Act Investmentsteuergesetz InvStG Irrespective of whether a hedge fund is offered by way of ldquo;private placementrdquo; or ldquo;public offeringrdquo; and whether it is a German or nonGerman hedge fund all hedge funds aimed at investors resident in Germany must comply with the German tax requirements in order to be attractive to German in http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/F100BC83-F33F-4521-94E62ED6A6B8A51F 2006 On November 4 2005 the longawaited Spanish Collective Investment Institutions Regulation subsequently the ldquo;Regulationrdquo; was finally approved This Regulation introduces for the first time in Spanish legislation both hedge funds free investment collective investment institutions ie single manager funds and funds of hedge funds funds of free investment collective investment institutions ie multimanager funds providing a regulatory framework that is expected to permit the growth of hedge http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/BF0FCDC1-4E3F-4478-92216FB685A862FB 2006 In May 2002 the Hong Kong Securities and Futures Commission SFC issued its guidelines governing the authorisation of hedge funds for public distribution in Hong Kong On November 28 2002 the SFC announced the authorisation of the first three hedge funds: one fund of hedge funds FoF and two single strategy hedge funds Concurrently the SFC also released the Guidelines on Hedge Funds Reporting Requirements and investor educational materials on hedge funds Since then 10 further funds have been approv http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/8C089A49-C455-43EA-9DF17B03A86EDF45 2006 This article looks at some common problems that could bring into question the tax residence of an offshore entity Most UK hedge fund managers will have sought tax advice and will be fully aware of the need to ensure that the offshore funds in question are managed and controlled outside the UK This advice applies equally to any other offshore entity within the fund or management structure including offshore management employment or marketing companies Based on this advice the funds will have a ma http://www.caseyquirk.com/docs/whitepapers/06.07_WP_BusBnchmrki_185797.pdf 2006 http://papers.ssrn.com/abstract_id=1113042 2006 http://www.aima.org/uploads/AIMAItalySurveyJune06ENGLISH.pdf 2006 http://papers.ssrn.com/abstract_id=1113062 2006 http://papers.ssrn.com/abstract_id=869769 2006 http://papers.ssrn.com/abstract_id=924565 2006 http://papers.ssrn.com/abstract_id=928215 2006 http://www.edhec-risk.com/features/RISKArticle.2006-10-02.0711/attachments/EDHEC%20Comments%20on%20Amaranth%20Case.pdf 2006 http://papers.ssrn.com/abstract_id=912964 2006 http://papers.ssrn.com/abstract_id=676110 2006 http://papers.ssrn.com/abstract_id=900006 2006 http://papers.ssrn.com/abstract_id=913362 2006 http://papers.ssrn.com/abstract_id=905600 2006 http://eu.wiley.com/WileyCDA/WileyTitle/productCd-047198020X.html 2006 http://eu.wiley.com/WileyCDA/WileyTitle/productCd-0470026634.html 2006 http://papers.ssrn.com/abstract_id=948907 2006 http://eu.wiley.com/WileyCDA/WileyTitle/productCd-0470043571.html 2006 http://papers.ssrn.com/abstract_id=928689 2006 http://db.riskwaters.com/public/showPage.html?page=book_page&tempPageName=341963 2006 http://db.riskwaters.com/public/showPage.html?page=book_page&tempPageName=320709 2006 http://papers.ssrn.com/abstract_id=967662 2006 http://papers.ssrn.com/abstract_id=931884 2006 http://papers.ssrn.com/abstract_id=1105070 2006 http://www.kogan-page.co.uk/bookdetails.aspx?ISBN=9780749445768 2006 http://www.pwc.com/gx/eng/about/svcs/corporatereporting/IFRSInvestorSurvey.pdf 2006 http://www.bnymellon.com/news/commentaries/assetmanagement/hedgefunds2.pdf 2006 http://www.woodheadpublishing.com/en/book.aspx?bookID=343 2006 http://www.cass.city.ac.uk/airc/pdf/WP-FF-35-2006.pdf 2006 http://www.pearsoned.co.uk/Bookshop/detail.asp?item=100000000232371 2006 http://papers.ssrn.com/abstract_id=926181 2006 http://faculty-research.edhec.com/73430024/1/fiche___pagelibre/ 2006 http://eu.wiley.com/WileyCDA/WileyTitle/productCd-0470050829.html 2006 http://papers.ssrn.com/abstract_id=955807 2006 http://papers.ssrn.com/abstract_id=943785 2006 http://www.campden.com/default.asp?page=static&name=private%20wealth%20management 2006 http://papers.ssrn.com/abstract_id=873465 2006 http://papers.ssrn.com/abstract_id=969988 2006 http://riskbooks.com/Executive%20Reports/sarbanes-oxley.php 2006 http://papers.ssrn.com/abstract_id=891867 2006 http://www.aima-australia.org/forms/JEvans_Paper.pdf 2006 http://www.cass.city.ac.uk/airc/papers.html 2006 http://papers.ssrn.com/abstract_id=926807 2006 http://www.mckinsey.com/clientservice/financialservices/latestthinking/The_Asset_Management_Industry_in_2010.pdf 2006 http://cisdm.som.umass.edu/research/pdffiles/benefitsofhedgefunds.pdf 2006 http://papers.ssrn.com/abstract_id=896701 2006 http://www.imf.org/external/pubs/ft/wp/2006/wp06217.pdf 2006 http://www.aci-uk.com/docs/model_code.pdf 2006 http://papers.ssrn.com/abstract_id=896680 2006 http://papers.ssrn.com/abstract_id=687230 2006 http://www.kpmg.ca/en/industries/fs/banking/documents/CREATEreport_2006.pdf 2006 http://papers.ssrn.com/abstract_id=884266 2006 http://www.whartonsp.com/bookstore/product.asp?isbn=0132350114 2006 http://papers.ssrn.com/abstract_id=908609 2006 http://www.russell.com/DE/AlternativeInvestingSurvey.pdf 2005-2006 http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/3036D88B-F109-415A-BF218521A483B73C 2005 This article is the winner of the 2005 AIMA Canada Research Award which was sponsored by JCClark and RBC Capital Markets Hedge funds have existed since the 1960s but remained under the radar screen of the general public and most investors until 1998 when Long Term Capital Management lost 92 of investor capital Since that time sophisticated individual investors and institutions have continued to earn consistent and sometimes substantial returns from hedge funds but the general perception among mo http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/1FC5D1E5-EF83-442A-B2C42534A5E4F83E 2005 The BSE Sensex the benchmark of large cap Indian stocks has climbed vertiginously past 8000 an appreciation of almost 80 from the troughs of 4505 on May 17 2004 Foreign Institutional Investors FIIs have poured close to 17 billion into the Indian equity markets since January 2004 more than 44 of the cumulative foreign flows since the markets were opened to foreign investors in 1993The Indian market is in the grip of euphoria often seen in the past 15 years always holding promise but seldom failin http://aima.org/en/knowledge_centre/education/aima-journal/index.cfm/jid/B8487A3F-F8FA-476D-AED73A6C0AE7A235 2005 Hedge funds have long played a material role in the investment portfolios of ultra high net worth individuals in the United States There has been a metamorphosis in hedge funds since Alfred Winslow Jones pioneered the concept back in 1949 Initially hedge funds were designed to be focused on returns first and risk second As more and more institutions have made their way into the marketplace the emphasis has shifted from being returnfocused to riskfocused This shift ironically has made hedge funds http://www.cityandfinancial.com/assets/documents/20060105145027FINAL_Alternative_Investment_Fund__WEB.pdf 2005 http://www.kcsfunds.com/files/other_files/BrulhartKlein-March9.pdf 2005 http://www.aima.org/aima.asp?id=40 2005 http://papers.ssrn.com/abstract_id=670089 2005 http://eu.wiley.com/WileyCDA/WileyTitle/productCd-0471731749.html 2005 http://www.commonfund.org/Commonfund/Archive/CF+Institute/CBS_educ_fdn_press_0105.htm.htm 2005 http://papers.ssrn.com/abstract_id=706282 2005 http://papers.ssrn.com/abstract_id=850304 2005 http://search.ssrn.com/abstract_id=1113782 2005 http://papers.ssrn.com/abstract_id=476862 2005 http://papers.ssrn.com/abstract_id=690301 2005 http://papers.ssrn.com/abstract_id=706121 2005 http://eu.wiley.com/WileyCDA/WileyTitle/productCd-0471715441.html 2005 http://www.deutsche-bank.de/presse/en/content/press_releases_2005_2725.htm?month=6 2005 http://www.aima-canada.org/doc_bin/AIMA_Disclosure_Promotion-June14Final.pdf 2005 http://www.lintstock.com/pubs.php 2005 http://www.radleyassociates.com/downloads/HedgeFundReportJune2005.pdf 2005 http://www.edhec-risk.com/features/RISKArticle.2005-08-10.3923/attachments/Capacity%20Effect%20survey%20180705.pdf 2005 http://papers.ssrn.com/abstract_id=800665 2005 http://papers.ssrn.com/abstract_id=752094 2005 http://papers.ssrn.com/abstract_id=782791 2005 http://www.kpmg.ca/en/industries/fs/banking/documents/Hedgefundssurvey2005.pdf 2005 http://econpapers.repec.org/article/eeefinsta/v_3A1_3Ay_3A2005_3Ai_3A4_3Ap_3A522-543.htm 2005 http://papers.ssrn.com/abstract_id=1000176 2005 http://www.ordering1.us/bloombergbooks/product.php?sid=1&ccamp=GOOGLE&pid=27 2005 http://riskbooks.com/Hedge%20Funds/Managing-Hedge-Fund-Risk.php 2005 http://www.jpmorgan.com/pages/jpmorgan/am/ia/research_and_publications/survey_reports 2005 http://riskbooks.com/Operational%20Risk/operational-risk-new.php 2005 http://papers.ssrn.com/abstract_id=757892 2005 http://cityandfinancial.com/publications/?id=27&sector=10 2005 http://papers.ssrn.com/abstract_id=1109100 2005 http://papers.ssrn.com/abstract_id=649282 2005 http://www.booksonbiz.com/estore/index.php?main_page=pubs_product_book_info&products_id=44 2005 http://papers.ssrn.com/abstract_id=671443 2005 http://www.bluestone-capital.com/images/The_critique_of_pure_alpha_405.pdf 2005 http://www.mhprofessional.com/product.php?isbn=0071456104&cat=&promocode= 2005 http://www.worldscibooks.com/economics/5863.html 2005 http://www.euromoneyplc.com/product.asp?PositionID=search&ProductID=3665 2005 http://papers.ssrn.com/abstract_id=855424 2005 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