Tuesday, 2 September 2014
Last updated 22 sec ago
Mar 20 2013 | 12:12am ET
Hedge fund managers newly registered with the Securities and Exchange Commission may want to rethink those junket plans.
The regulator is zeroing in on fees and expenses hedge funds and private equity firms charge their clients as part of the "presence exams" they are making in the wake of the Dodd-Frank financial regulation reform, which requires larger hedge funds to register with the SEC. In particular, "exotic expenses"—travel, dining, entertainment and consulting arrangements—are drawing scrutiny.
The SEC hasn't said such potentially lavish expenses are out-of-bounds, although it may make recommendations regarding them over the next two years. But the agency can insist that a firm reimburse expenses if they are deemed inappropriate.
For the most part, however, the SEC seems primarily to be digging in to expenses that are not broken out in hedge fund disclosures, asking for a breakdown. In some cases, the examiners may ask why a firm chose to use a private jet or fly executives first-class on clients' dime; in at least one case, the SEC asked for receipts for air travel and an agenda for the meeting traveled to, to ensure that charge to investors "really was the expense the fund was claiming," Simon Compliance founder Lindsey Simon told The Wall Street Journal.
"As fiduciaries, hedge fund advisers need to develop policies and procedures that allocate their fees and expenses fairly," the SEC said.
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...