Tuesday, 23 September 2014
Last updated 3 hours ago
Jun 23 2006 | 7:36pm ET
The Securities and Exchange Commission has announced new rules aimed at making funds-of-hedge funds more transparent, but according to one lawyer, money managers shouldn't sweat it.
The rules, which were adopted on Wednesday, require any registered fund that invests its assets in another fund to disclose the cumulative amount of expenses charged by the fund and any of the sub-funds in which it invests. However, George Zornada, a partner at law firm Kirkpatrick & Lockhart Nicholson Graham, said that private funds, including most hedge funds and fund-of-hedge funds, will not be affected by the rule.
"These rules apply only to registered investment companies," said Zornada. "There are some hedge funds that are registered investment companies (such as Man Investments), but the rules relate solely and absolutely to registered investment companies."
According to a statement by the SEC, "the rules impose restrictions on these [fund-of-funds] arrangements to prevent abusive 'pyramiding' schemes."
The regulatory agency also said that the increased transparency allow investors to more easily understand and compare the relative costs of different funds-of-funds arrangements.
Zornada explained that the rule was proposed three years ago and since been on the back burner because the SEC was so busy with the mutual fund scandals. However, now that the SEC has a permanent director there is pressure to move exceptive applications along faster.
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitich, CIO of Petty Endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
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…
Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.