Lemelson Capital featured in HFMWeek

www. hfmweek .com JP MORGAN ASSET Manage- ment is preparing to seed Aithon Capital Management, a new hedge fund manager being launched by Soros Fund Management and Caxton Associates alumnus Hal Lehr. HFMWeek was first to report on Tuesday that Aithon will launch on 2 January with $100m and JP Morgan will account for more than half the initial assets. Aithon will deploy a global macro strategy within a master feeder structure, using relative value approaches across a spec- trum of commodities and liquid macro instruments. It uses a proprietary investment process, called Precursors, Predictors and Events (PPE) that Lehr devised for research and risk. Lehr was a commodity trading executive at Deutsche Bank until leaving at the end of 2012, before which he held positions at Harbert Management Corp., Soros Fund Management and Caxton Associates. Upon leaving Deutsche Bank, Lehr was originally going to launch a hedge fund but decided to spend 2013 in a portfolio advisory capacity for Carlyle Group- owned hedge fund Vermillion Asset Management. Lehr has filled Aithon’s team with six other people he has worked with at Hal Lehr plans 2 January start for Aithon News breaks as ‘20 for 2015’ list released BY ELANA MARGULIES 03 COMMENT CL ARI FYI NG CFTC EXEMPTI VE RELI EF AND GUI DANCE 14 Former Caxton, Soros pro backed by JP Morgan WHO WANTS TO BE AN SEC TARGET? LAWYERS SAY TAKE-UP OF THE JOBS ACT’S ADVERTISING FLEXIBILITIES IS LIKELY TO BE LIMITED FEATURE 20 The long and the short of it ISSUE 354 25 September 2014 NEWS 11 OMNI PARTNERS LAUNCHES LONG/SHORT HEDGE FUND London firm starts fourth strategy as internal offering opens up LAUNCH 05 MILLENNIUM-LINKED PINZ CAPITAL PLANS LAUNCH Matthew Pinz to lead New York’s latest event-driven launch NEWS 06 CREDIT SUISSE HIRES NEW EUROPEAN CONSULTING CHIEF Swiss bank swoops for ODD specialist Vincent Vandenbroucke 2 0 F O R 2 0 1 5 FE ATURE 16 HFMWeek lists the 20 launches generating the most interest among investors One part of hedge fund management just got easier: Finding the right advice to fit your size. Whether you’re building a hedge fund from the ground up or managing a large global fund platform, finding the right assistance—from launch to globalization—just got easier. Combining the resources and experience of KPMG and Rothstein Kass means superior service, market-leading insights and global reach. All under one roof. For more information, contact Chris Mears [email protected] kpmg.com/us/alts 2 5 S E P – 1 OC T 2 01 4 NEWS HF MWE E K . COM 3 If you have a news story for HFMWeek, please email: [email protected] PEOPLE MOVES various times in his career from Harbert, Deutsche Bank, Morgan Stanley and Soros. Aithon has 2/20 fees, quarterly liquidity and a $1m investment minimum. Service providers include Deutsche Bank as prime broker and Akin Gump Strauss Hauer & Feld as legal counsel. Aithon and JP Morgan spokes- persons declined to comment. The news coincides with the release of ‘20 for 2015’, HFMWeek’s annual list of impending launches (see page 16), which comes as confidence rises among prime brokers about the market. “We are in the most robust hedge fund start-up market since the crisis – the days of the $1bn launch are well and truly back,” said Omeed Malik, who heads Bank of America Merrill Lynch’s emerging manager program and US prime brokerage distribution. “It feels exactly the same here,” said Carl Davey, who runs hedge fund sales in Asia for Citi Investor Services. “We are seeing a good number of new firms led by pedigreed managers.” Four of the 20 managers on this year’s list are based in Asia, compared to just two last year, echo- ing improving confidence about the market for new hedge funds in the region. However, opinion was split among HFMWeek readers, with just over half describing the state of the global launch market as ‘middling’ and the remainder roughly split on the prospects for new hedge funds (see page five). Long/short equity is the best- represented strategy on the list. “It is the strategy of choice for investors,” added Malik, “and also where you are seeing the largest, most high-profile and best-pedigreed start-up managers.” Turn to page 16 for the full list. [email protected] Additional reporting by Will Wainewright CONTI NUED FROM PAGE 1 Alcentra 8 Arkkan Capital Management 7 Balyasny Asset Management 5 BozValen Asset Management 7 Caxton Associates 1, 5 DragonBack Capital 7 Duet Group 5, 6 Eagle Bay Capital 11 Gemcorp 5 Gondor Capital Management 10 Hermes BPK 6 Highbridge Capital Management 8 HT Capital Management 7 JP Morgan Asset Managemet 1 K2 Advisors 10 Kontiki Capital Management 7 Lampe, Conway & Co 10 Millennium Management 5 Moore Capital Management 5 Mount Kellett Capital 7 Omni Partners 11 Ouroboros Asset Management 10 Pinz Capital Management 5 Pleiad Investment Advisors 7 Quantum Global Investment Mgmt 6 Shoreline Capital 8 Soros Fund Management 1 TT International 11 Two Creeks Capital Management 7 Viking Global Investors 5 FUND MANAGER INDEX I N T H I S I SSUE KCERA mulls hedge fund investments KERN COUNTY Employees’ Retirement Association (KCERA) is mulling up to two more hedge fund investments as it awaits the chance to allocate to soft-closed activist manager Cevian Capital. The $3.5bn pension scheme has signed off a $17m allocation to Stockholm-based Cevian Capital, an event-driven firm with $13.6bn AuM, but must wait for other investors to redeem before it can invest as the fund has soft-closed. KCERA’s CIO Pete Tirp said that allocation was likely to happen in the next two quarters, making Cevian Capital the sixth hedge fund to be hired by KCERA this year. He said the pension is conducting due diligence on two other hedge funds with a view to adding at least one more to reach its target exposure level of 10% before the end of 2014. KCERA has 13 hedge fund managers approved or invested in including Cevian Capital. [email protected] HSBC prime services head leaves role HSBC PRIME SERVICES global head of sales Chris Barrow has left his role. Barrow headed up the London- headquartered bank’s sales and marketing efforts until Friday, a source told HFMWeek. He remains listed on the FCA register in connection with HSBC but a bank spokesperson declined to comment on his next move. HSBC’s hire of Barrow in early 2010 was described at the time as one of the most high-profile addi- tions to its prime services team. Barrow joined HSBC from Normura, where he was international head of sales for prime services. He had a previous stint at HSBC between 2004 and 2007 as head of sales and marketing for the global equity finance team. HSBC established its prime services team in 2009, gaining market share by bringing together its custody business and global markets arm. [email protected] SE ARCH “W e are in the most robust hedge fund start-up market since the crisis,” a senior prime broker from Bank of America Merrill Lynch told us this week. It’s a bullish view of launch activity echoed by many of his peers we spoke to as part of our ‘20 for 2015’ run-down of start-ups tipped to make the biggest impression next year (p.16-19). As you’d expect, the list is domi- nated by US funds but also includes a number of notable London launches and four Hong Kong-based start-ups, which experts say is an indication of a renewed buzz not seen in the region for years. Events at SAC Capital Advisors and the closure of Ziff Brothers’ hedge fund investing unit have added momentum to the current wave of high-profile new launches, trigger- ing managers with pedigree to go it alone. The growing number of soft closures is also creating an attractive environment for start-ups that manage to get off the ground. Although some investors are wary of investing in unproven funds, others see the potential for uplift in the early years. Hedge Fund Research data we’ve compiled (p. 4) shows the huge outperformance of emerging managers, 80.5% since 2007 compared to an industry benchmark of 33%. But there are also significant challenges for funds looking to launch. This week’s reader’s survey suggests many managers are less sanguine about the new launch market (p. 5). Panellists at last week’s HFMWeek breakfast briefing in London said the introduction of the AFIMD had sty- mied launch activity in Europe and pointed to the length of time taken to get regulated in the UK, up to nine-months in some cases, as being a significant barrier. Although some clarity is still required around the AIFMD, a more stable regulatory outlook may well boost launches in the region next year. A bigger talking point may well be the size of the launch market which will be made up of Ucits rather than traditional Cayman-based funds. Definitely one to watch. [email protected] EDITOR’S VIEW BY PAUL McMILLAN @mcmillan_paul P A G E I N S I G H T 2 5 S E P – 1 OC T 2 01 4 4 HF MWE E K . COM NEW MANAGERS LEAD THE WAY SOURCE: HEDGE FUND RESEARCH Emerging hedge fund managers continue to lead industry performance, according to Hedge Fund Research data. Managers with a track record of less than two years posted one-year returns of 11.27%, compared to 9.05% for the HFRI Fund Weighted Composite Index. Funds owned by women and ethnic minorities also continued to outperform with the HFRI Diversity Index posting returns of 11.09% over the same period. Since the start of 2007, emerging managers’ returns are 80.5%, or an annualised 8.19%, compared to the diversity index on 51%, annualised at 5.67% and the HFRI Fund Weighted Composite Index at 33%, annualised at 3.94%. The HFRI Fund of Funds Composite Index struggled behind the others with total returns of 12.28%, annualised at 1.56%, with an annual volatility of 5.86%, higher than the emerging manager index volatility of 5.16%. Meanwhile, launch activity appears to be steady with 574 launches in the first half of the year compared to between 1,060 and 1,113 for the previous three full years. Liquidations appear around the same as 2013 with 461 in the first half of 2014, compared to 904 in 2013, a figure that has steadily risen since the 743 liquidated in 2010. M A R K E T M O N I T O R B E N C H M A R K S H I G H S & L O W S INDEX PERFORMANCE 22 Aug - 22 Sep 2014 (%) FTSE 100 NASDAQ S&P500 HFR INDEX YTD RETURNS SOURCE: HSBC ALTERNATIVE INVESTMENT GROUP HEDGE FUNDS Pershing Square Intl Ltd 29.89% Pharo Trading Fund 21.34% CC Asia Absolute Return Fund -20.06% Rubicon Global Fund -23.27% HIGH LOW -1.2 -1.0 -0.8 -0.6 -0.4 -0.2 -0.0 0.2 0.4 0.6 0.8 22/09 18/09 16/09 12/09 10/09 08/09 04/09 02/09 29/08 27/08 25/08 800 900 1000 1100 1200 1300 1400 1500 1600 1700 1800 1900 2007 2008 2009 2010 2012 2013 2014 HFRI Fund Weighted Composite Index HFRI Fund of Funds Composite Index HFRI Diversity Index New Managers Launches Liquidations -1200 0 400 -400 800 -800 -1600 1200 2011 2007 2008 2009 2010 2012 2013 2014 2011 1197 -563 -1471 -1023 -743 -775 -873 -904 -461 659 784 935 1113 1108 1060 574 HF MWE E K . COM 5 Ex-Goldman partner leads Gemcorp launch A FORMER GOLDMAN SACHS partner has emerged as the CEO of Gemcorp, a new emerging markets- focused investment firm based in London. Atanas Bostandjiev specialised in emerging markets for the US bank before joining VTB Capital International, Russia’s largest bank, in 2011 as UK and international CEO. He left this summer. Gemcorp said in a statement on Monday it has raised $500m from European institutional investors to find and execute deals in emerging markets. HFMWeek was first to report on the fund’s development earlier this year.. Bostandjiev is leading a 17-person team that includes several colleagues with whom he previously worked at Merrill Lynch. They include managing partner Selim Basak and partner Bojidar Savkov. Tue Sando will lead the firm’s legal and compliance after joining as partner from Duet Group. “We want to position ourselves as the access point for institutional investors when it comes to investing in emerging market sovereign and private sectors,” said Bostandjiev. “We see a gap where traditional financial institutions are unable to meet the demand from emerging markets clients for flexible and reliable debt or equity financing solutions.” Gemcorp said investors have signed up to a lock-up period of five years. [email protected] 2 5 S E P – 1 OC T 2 01 4 PINZ CAPITAL Manage- ment, which ran money for Millennium Management, has split from Izzy Englander’s firm to launch its flagship event-driven strategy independently, HFMWeek has learned. Matthew Pinz’s fund, named Pinz Capital International, will debut imminently and plans to raise an initial $250m from investors globally before soft-closing, according to a source familiar with the plans. Pinz spent almost three years as a trader at Caxton Associates before joining Balyasny Asset Management as a portfolio manager in 2005, spending almost four years there. He had previously worked for Citigroup and Arnhold and S. Bleichroeder, and studied at Boston University’s School of Management. Pinz Capital Manage- ment, founded in March 2009, has been running money solely for Izzy Englander’s firm without other outside investors. Justin Lee, who used to work with Pinz at Balyasny as an analyst, also joined the firm for the launch. Pinz Capital charges fees of 1.5/20, has a $500,000 investment minimum and quarterly liquidity. Pinz Capital’s service providers include Jefferies as the prime broker and Mark LoPresti as the legal counsel. A Pinz spokesperson declined to comment. Millennium was founded by Englander in 1999 and manages around $23.8bn, which is allocated among its numerous trading teams. [email protected] Millennium-linked Pinz Capital plans launch Matthew Pinz to lead New York’s latest event-driven launch L AUNCH SEPTEMBER 2014 HFRX HEDGE FUND INDEX (YTD 19 SEPTEMBER 2014) I N D I C E S MERGER ARBITRAGE 1.31% EQUITY LONG/SHORT 1.75% GLOBAL MACRO 2.52% HEDGE FUNDS 2.02% FUNDS OF HEDGE FUNDS* 2.67% RELATIVE VALUE 0.57% EQUITY SHORT BIAS* -5.14% EVENT DRIVEN 3.51% EMERGING MARKETS* 4.31% EQUITY MKT NTRL 2.38% MULTI STRATEGY* 3.04% HFRI composite * As of 31 August $23.8bn MILLENNIUM MANAGEMENT ASSETS L AUNCH 20 FOR 2015 FEATURE P16 2 5 S E P – 1 OC T 2 01 4 16 HF MWE E K . COM 2 0 F O R 2 0 1 5 As confidence in the hedge fund start-up market builds, HFMWeek examines the pipeline and lists the 20 freshest launches generating most interest among investors BY WILL WAINEWRIGHT FEATURE 20 FOR 2015 hedge funds has been helped in particular by the emergence of new seeding ventures.” But while this year’s list features seeding activity from names ranging from Blackstone to Leucadia National Corp, many prime brokers believe seed deals have become less important in the last couple of years. “Founders share classes are becoming much more prevalent and are largely the preferred option,” says Malik. As with the wider industry, long/short equity dominates the strategy composition of the list. “Equity long/short is certainly du jour,” adds Malik. “It is the strategy of choice for investors and also where you are seeing the largest, most high-profile and best-pedigreed start-up managers.” The majority of the ‘20 for 2015’ managers have come from other hedge funds as opposed to banks. “Investors have more confidence in the ‘been there done that’ credentials of managers who have been PMs at other hedge funds, but a few continue to make it from other backgrounds,” says Davey. A senior prime broker in London says the failure of Goldman Sachs spinout Edoma Partners, which was Europe’s biggest post-2008 hedge fund launch, has not helped the reputation of bank spinouts. “Managers need the three Ps: pedigree, performance and product,” says Malik. “That gets you in the door. But these managers from brand-name hedge funds fall into two categories – those who were investor facing and those who weren’t. The cream of the crop money managers built LP relationships, and investors were able to build trust in them and their processes. “Investors are much likelier to come in day one to those managers. It separates the $100m launch from the $1bn launch.” That assets total, as ever, remains the Holy Grail for new hedge fund launches. The next 12 months will determine how many of this year’s crop reach it. T he post-crisis era has proved challenging for new hedge funds, but industry participants have become notably bullish about the start-up market. “We are in the most robust hedge fund start-up market since the crisis – the days of the $1bn launch are well and truly back,” claims Omeed Malik, who heads Bank of America Merrill Lynch’s emerging manager programme and US prime brokerage distribution. “It feels exactly the same here,” says Carl Davey, who runs hedge fund sales for Citi Investor Services in Asia. “We are seeing a good number of new firms led by pedigreed managers, who are building ‘institutional-grade’ infrastructures and attracting significant day-one capital.” The positivity seems to be borne out by the numbers, with several constituents of last year’s list of new hedge funds raising more than $1bn, and at least one – Herb Wagner’s Finepoint Capital – surpassing $2bn. Sources say a “perfect storm” of factors have combined to provoke the uptick in interest, all of which have impacted HFMWeek’s latest round-up. The downsizing of SAC Capital Advisors, since re-named Point72 Asset Management, and closure of Ziff Brothers’ hedge fund investing unit have both had big impacts. Four constituents of this year’s list are being launched by managers who previously held senior positions at Ziff, while three worked at Point72. A further three new firms recently launched by SAC alumni in the UK – Ayora Capital Management, Pagliaro Capital Management and HSE Capital Management – have also generated headlines, but did not make the list. Observers say another factor swelling the launch numbers for new firms is the fact that many brand-name hedge funds are closed to new money, improving the appeal of new hedge funds started by alumni of those firms. “A number of higher- profile managers here in Asia are soft-closed to new money, which has provided opportunities for new launches to enter the market,” adds Davey. His colleague Carol Teng, who works for Citi’s cap intro team, adds that the rise of new seeding efforts such as HS Group has boosted the market. “The fundraising environment for new Asian ABBERTON CAPITAL MANAGEMENT FOUNDER: Fredrik Juntti FOUNDED: April 2014, London One third of the founding trio behind Montrica Investment Management, a pre-crisis success story later swallowed up by TPG Axon, Juntti is returning with Abberton Capital Management, a highly tipped London-based start-up. His earlier co-founders are coincidentally also launching ventures this year – Svein Hogset with Incentive AS in Norway and Andrew Metcalfe with Lakefour Investment Management in Switzerland – but sources say Abberton looks set to raise the most backing. Meditor Capital Management COO Craig Simkins has been brought on to run operations for Abberton, an activist investment firm, which was planning to launch next quarter with assets of around $200m. 016_019_HFM354_20for2015.indd 16 VIKING CTO DEPARTS NICK LAGAROS HAS LEFT HIS ROLE as chief technology officer at Viking Global Investors, sister title HFMTechnology has learned. Lagaros had been CTO since June 2010. Previously, Lagaros spent 16 years at Moore Capital Management in a similar position and has also worked in IT at Swiss Bank. Viking, with reported AUM of $24bn and headquartered in Connecticut, declined to comment on the move other than to confirm Lagaros’s exit. The firm recently restructured its chief investment officer position, with Tom Purcell, a co-CIO with Dan Sundheim, leaving his role for a six- month sabbatical in July. [email protected] Opinion is mixed among readers on the state of the hedge fund launch market , with more than half describing it as ‘middling’ in HFMWeek’s reader survey. More than a quarter said it was strong, convinced by an uptick in $1bn- plus launches this year, but almost the same amount described it as weak. Talented managers would be put off by the high costs involved, according to 22%. READER SURVEY HOW DO YOU VIEW THE CURRENT HEDGE FUND LAUNCH MARKET? Strong – the launch market is healthier now than at any time since before 2008 25.9% Middling – it remains hugely challenging to launch 51.9% Weak – most talented managers choose to join existing firms rather than go it alone 22.2% 2 5 S E P - 1 OC T 2 01 4 6 HF MWE E K . COM Credit Suisse has hired Aditi Velakacharla to head a team linking potential investors with Asian hedge funds, Bloomberg reports. Velakacharla is expected to start in Hong Kong in November. Steve Cohen’s Point72 Asset Management has lost three employees – Tim Schneider, Pete Avel- lone and Shoney Katz – to Ken Griffin’s Citadel and money managers Chandler Bocklage and Ted Orenstein. BlueBay Asset Manage- ment has appointed Wike Groenenberg as alternative strategy director. Groenenberg will manage the BlueBay Macro Fund and oversee investor relations. Jefferies International has hired former Credit Suisse head of Nordic investment banking Fredrik Wranéus to run a planned office in Stockholm. Pioneer Underwriting Limited has appointed Simon Holt as financial institutions underwriter for its new Financial Institutions (FI) offering. Holt was previously at insurance company Travelers. P EOP L E M O V E S PEOPLE MOVES Duet makes senior portfolio manager hire DUET ASSET MANAGEMENT has appointed Joe Delvaux as a senior portfolio manager within the Africa liquid strategies team. Delvaux was formerly head of Africa and Middle East equities at Swiss fund manager Quantum Global Investment Management, where he managed its African Opportunity Fund. His appointment was confirmed by Ayo Salami, CIO of London-based Duet’s Africa liquid strategies team. Prior to Quantum, Delvaux worked at Kingsley Asset Management and Insparo Asset Management. The Duet Mena Horizon Fund was up by 22% in the year through 31 August, according to Zawya, a data provider. But Duet Global Fund Plus is down by -1.63% in 2014, according to HSBC data. Duet was founded by Henry Gabay and Alain Schibli in 2002 and managed $5.3bn as of 30 June 2014. [email protected] PEOPLE MOVES SPONSORED BY CREDIT SUISSE HAS appointed Vincent Vandenbroucke, ex-head of operational due diligence at Hermes BPK, to lead its European prime brokerage consulting effort. The appointment follows the departure of John Hindley, who ended a four-year stint at the Swiss bank earlier this year for a partner role at recruiting firm Heidrick & Struggles. Vandenbroucke started his new role based in Credit Suisse’s London office last Monday, and confirmed his appointment by telephone to HFMWeek last week. He spent five years at Hermes BPK and also counts Soros Fund Management among his former firms, spending almost two years as controller in its private equity department. He has also worked for Axa Investment Managers, Pioneer Alternative Investments and Olympia Capital Management. The appointment is the latest to affect the consulting space after Deutsche Bank’s European head, Chris Farkas, recently left for Deloitte. Consultants offer hedge funds support with operational, technological and other matters in tandem with the lending functions offered by prime brokerages. [email protected] PEOPLE MOVES Credit Suisse hires new European consulting chief Swiss bank swoops for ODD specialist Vincent Vandenbroucke AUGUST 2014 ABSOLUTE RETURN INDICES SOURCE: Newedge Prime Brokerage Group AUG 2014 EST -0.67% YTD 2014 EST -2.25% VOL ATI LI T Y TR ADI NG I NDEX SUB-INDICES EQUITY STRATEGIES AUG 14 2.05% YTD 4. 80% TRADING STRATEGIES AUG 14 0. 59% YTD 3. 86% AUG 2014 EST 0.82% YTD 2014 EST 4.01% COMMODI T Y TR ADI NG I NDEX QUANTITATIVE AUG 14 3. 89% YTD 6. 56% DISCRETIONARY AUG 14 -0. 70% YTD -3. 37% AUG 2014 EST 1.16% YTD 2014 EST 0.23% MACRO TR ADI NG I NDEX SUB-INDICES I N D I C E S The founder of InfraHedge, a hedge fund managed account platform, has been appointed by Barclays to run its wealth and investment management unit. Akshaya Bhargava (pictured) will start next month in replacement of Peter Horrell. Bhargava sold InfraHedge, which he launched in 2010, to State Street last year. He previously worked at Citibank for 22 years. THE WEEK Goldman Sachs PB hires Topkins GOLDMAN SACHS PRIME SERVICES has hired Alex Topkins from Barclays Prime Services as vice president in its capital introductions group, HFMWeek has learned. Topkins spent over seven years in the capital introductions unit at Barclays Prime Services, which emerged in the wake of the financial crisis when Barclays bought the business from Lehman Brothers. He initially joined Lehman Brothers in July 2007 and his most recent position was as vice president in capital introductions, a position he held since February following his pro- motion from associate vice president . According to a source, Topkins will start in early December. The firms declined to comment . [email protected] PEOPLE MOVES HF MWE E K . COM 7 2 5 S E P – 1 OC T 2 01 4 Julian Robertson (pictured) has voiced concerns about the bond market, calling it a “bubble” that “will burst in a very bad way”. The Tiger Management founder’s fears were echoed by William Conway, a co-founder of Carlyle Group. The pair were speaking in New York at a conference organ- ised by Bloomberg. However, Conway remained optimistic on the US, saying: “The American economy is the best place to invest right now”. FORMER SAC CAPITAL manager Ken Xu is launching a new hedge fund in Asia named BozValen Asset Management, one of several new firms drawing interest as buzz over Asian start-ups builds. Xu joined Steve Cohen’s firm, since renamed Point72 Asset Management, in 2011 and left earlier this year to build long/short equity firm BozValen. He is working with Simon Kemp, previous head of trading at Mount Kellett Capital, and Katherine Quinn, previously COO at HT Capital Management and DragonBack Capital, who have the same roles at BozValen. The firm is one of four new Asia- based hedge fund operators included in ‘20 for 2015’, HFMWeek’s annual round-up of launches generating the most interest among industry participants. Last year’s list featured just two Asia-based firms. Carl Davey, who leads Asia hedge fund sales for Citi Investor Services, said the market for new hedge funds in Asia is stronger than at any point since the 2008 crisis. “We are seeing a good number of new firms led by pedigreed managers, who are building ‘institutional-grade’ infrastructures and attracting significant day-one capital,” he said. Kontiki Capital Management, headed by ex-Ziff Brothers Asia head Gregard Heje, and Pleiad Investment Advisors, led by a pair of Soros Fund Management alumni, are also on the list. The fourth Asia-based launch to feature is Arkkan Capital Management, headed by former Goldman Sachs special situations chief Jason Brown, who has reportedly won $200m from Blackstone. [email protected] BosValen draws interest as Asia launch buzz builds Ex-SAC manager behind one of four Asia start-ups in HFM list L AUNCH WHO WANTS TO BE AN SEC TARGET? FEATURE P20 www.onetenassociates.com SpeciaIist Hedge Fund Recruiter [email protected] W E E K I N N U M B E R S Calpers announces plan to redeem entire hedge fund allocation Reports of new hedge fund activist involvement prompts quick rise in Adidas’s share price Goldman Sachs’ Oryza Asia hedge fund has a successful first year of fund-raising Elliott Management makes almost $100m by selling stake in UK retailer Game Digital More than two million Scots vote to remain part of the UK in last week’s referendum $4.5bn 4% £58.5m 55.3% $1bn THE WEEK 20 HF MWE E K . COM URE JOBS ACT 2 5 S E P – 1 OC T 2 01 4 DON STEINBRUGGE, AGECROFT PARTNERS IT DEPENDED ON WHAT LAW FIRM YOU SPOKE TO – SOME LAW FIRMS PREVIOUSLY DID NOT FEEL COMFORTABLE WITH HEDGE FUNDS PUTTING ANYTHING OUT THERE ” Despite the CFTC’s recent shift to allow general solicitation, lawyers say take-up of the Jobs Act’s advertising flexibilities is likely to be limited BY MAIYA KEIDAN L ast autumn the SEC carried out Congress’s instruction to remove a decades-old ban on general solicitation of private funds. However, certain voices within the SEC were said to have concerns about the efect of hedge funds engaging in mainstream advertising activity and the agency proposed onerous accom- panying rules which made the new regime less atractive. Lawyers told atendees at an event in New York on 11 September that 1,000 private fund managers – of all kinds – had applied to market under the Jobs Act by checking box 506(c) of securities ofering Form D. But the hedge fund manager numbers are much lower, according to experts, with some even reported to have mis- takenly ticked the box. Under the new rules, managers can talk to the media more freely, engage in discussions on social media and at events, upgrade their websites to provide more information and advertise more generally. Several New York hedge fund lawyers have noted that while clients had approached them to consider venturing into general solicitation territory, few have proceeded. “It hasn’t taken of,” says Kevin Scanlan, partner at Dechert. “I don’t have any clients that have checked the 506(c) box, although multiple clients have talked about it.” One Boston-based lawyer says he’s seen limited take-up from a couple of smaller managers. “Tey are two smaller hedge fund managers really trying to raise capital and be more aggressive through press releases, newspaper ads and the media,” he says. Massachusets-registered Lemelson Capital Manage- ment is among these frms. Chief investment ofcer Em- manuel Lemelson says he saw the Jobs Act as an opportunity to speak freely “without having to choose every word carefully”. “We were geting good results and I thought why don’t we publicise that?” he adds. Te frm now sends out press releases on its performance and had secured four inter- views with the press that week. TALKING TO THE PRESS Speaking to the media is a key reason to tick the box to generally solicit, say experts. Prior to the Jobs Act, hedge fund managers could talk about the manager and their strategy but not the specifcs of the fund to the media. However, this was seen as a very grey area. “It depended on what law frm you spoke to – some law frms previously did not feel comfortable with hedge funds puting anything out there,” says Don Steinbrugge, managing partner at third-party marketer Agecrof Partners. And lawyers say that while many hedge fund managers are not interested in TV commercials or billboards at the Super Bowl, many are interested in speaking about performance to the press. “In the past if a reporter called you with incorrect data on your fund, you were not even allowed to correct them because of the anti-solicitation rules,” says one US lawyer. Max Hilton, director at PR frm Peregrine’s New York SEC TARGET? WHO WANTS TO BE AN 020_021_HFM354_jobsactfeature.indd 20 20 FOR 2015 TURN TO PAGE 16 FOR THIS YEAR’S rundown, which is heavily influenced by the closure of Ziff Brothers’ hedge fund unit and the downsizing of SAC Capital/Point72 in the wake of the insider trading scandal. Four of the 20 new managers last worked at Ziff Brothers, most notably Ryan Pedlow, whose New York-based Two Creeks Capital Management is one of the year’s largest start-ups. A further three last worked at SAC Capital. 2 5 S E P - 1 OC T 2 01 4 8 HF MWE E K . COM INVESTOR S E A R C H A C T I V I T Y INVESTOR IN BRIEF SPONSORED BY I NV E STOR I N B R I E F Cheshire West and Chester and the London Borough of Lambeth pension funds are among the UK schemes attending the 12th Annual Local Govern- ment Pension Investment Forum on 22 October. California Public Employ- ees’ Retirement System (Calpers) has appointed Ted Eliopoulos as CIO. He assumes the role perma- nently having served as interim CIO since June 2013. Cliffwater has been rehired as hedge fund consultant for the $80.6bn New Jersey Division of Investment. The decision to reappoint Cliffwater on a three-year contract with two additional one-year extensions follows an RFP issued in May 2014. London-based FoHF Headstart Advisers is as- sessing further Asia-focused investments after adding a third manager concentrated on the region in July. San Francisco Employees’ Retirement System has delayed a vote on whether to invest in hedge funds for at least 90 days, following an investment committee meeting at which CIO Bill Coaker presented a plan to invest up to 15% of the $19bn fund’s assets in hedge funds. CREDIT SPECIALISTS Highbridge Capital Management and Alcentra are in the running for an illiquid debt mandate from Essex County Council. The £4.3bn ($7bn) UK local authority scheme has named the two hedge funds alongside private equity firm Partners Group as finalists for the £80m to £100m ($130.2m to $162.75m) ticket. US-based Highbridge manages approximately $29bn across a number of equity and credit hedge, long- only and longer lock-up funds. In the last few months it has significantly increased its UK presence, adding 15 employees to its London office since January. BNY Mellon-owned Alcentra manages $23bn across 48 investment products while Zug-based Partners Group has €30bn across private equity, private debt, private real estate and private infrastructure. The pension fund started searching for a manager to run a long-only, multi-illiquid debt portfolio in May when it released a request for pro- posal (RFP). Essex County Council received interest from 32 managers, of which 15 completed and returned applications. The search for a manager to run a pooled illiquid debt fund investing in direct corporate lending, real estate lending and distressed debt was conducted by the pension scheme’s consultant, Hymans Robertson. [email protected] SE ARCH If you would like to comment on any investor-related news story or development, contact Alex Cardno, HFMWeek investment editor, at [email protected] SEARCH LOG CONTINUES ON P12 TCERA “struggling” with hedge fund decision TULARE COUNTY EMPLOYEES’ Retirement Association (TCERA) says it is “struggling” to reach a decision on increasing hedge fund exposure as it mulls different approaches to allocating to the space. The $1.07bn California pension fund has a 5% target allocation to the sector but current hedge fund exposure stands at 2.5%. It has been mulling further hedge fund investments for the last 12 months and was due to make a decision on increasing exposure at an investment committee meeting on 15 September. It is considering FoHF Fintan Partners for a possible investment due to its fixed income approach as it seeks ways to reduce equity risk exposure, but is also considering a risk parity approach to its entire portfolio. These decisions were debated in TCERA’s last two investment committee meetings, but retirement plan administrator David Kehler said no conclusion had been reached. “Our board has been struggling with the issue of our allocation to hedge funds for quite some time now,” he said. “The board is looking at ways to reduce the portfolio’s equity risk level so a manager like Fintan may be a good fit to meet that objective. The board is also considering a risk parity approach and has been debat- ing this along with the hedge fund allocation. I don’t think the questions we have regarding our exposure to hedge funds and/or a risk parity approach will be resolved any time soon.” [email protected] PENSI ON FUND Michigan Uni tops up Shoreline allocation THE UNIVERSITY OF Michigan endowment invested $30m in distressed and special situations manager Shoreline Capital earlier this year. The $9.5bn Ann Arbour, Michigan- based endowment invested in the Shoreline China Value III in April, according to an investment update. Based in Guangzhou, China, the firm makes distressed and special situations investments in mainland China. The University of Michigan endowment has had previous investments with Shoreline, investing $20m in Shoreline China Value II in October 2012, when it sought to diversify its exposure to distressed investments. Shoreline started trading in 2004 and was founded by Xiaolin Zhang and Benjamin Fanger. [email protected] ALLOC ATI ON WILTSHIRE BOND SEARCH ESSEX COUNTY COUNCIL’S search comes hot on the heels of Wiltshire County Council, which has begun its own search for multi-asset credit and absolute return fixed income managers. The £1. 7bn ($2. 76bn) pension fund has instructed investment consultant Mercer to start looking for managers in those areas as part of its bond allocation. Wiltshire currently has approximately £180m ($292.2m) dedicated to fixed income. The council has not yet decided how much might be allocated to the new mandate or whether the allocation will come from a reduction to traditional bond investments or from an expansion of that asset class. The pension fund decided last year to redeem from its only FoHF, Jubilee Advisers (previously named Fauchier Partners) after placing them on watch in 2012. A timeline and further details of the search will be discussed at Wiltshire’s next pension fund committee meeting on 11 December, but the mandate could be awarded next year. ILLINOIS TEACHERS’ RETIREMENT SYSTEM TOTAL AUM $45.3bn CONSULTANT Albourne ACTIVITY Seeking two to three non-directional hedge funds for allocations of between $150m and $200m each MERRANT FONDER TOTAL AUM $100m ACTIVITY Seeking two managers in relative value fixed income Highbridge closes in on Essex Council illiquid debt ticket Alcentra also running for £4.3bn UK scheme’s mandates PERMAL GROUP TOTAL AUM $22.3bn ACTIVITY Eyeing opportunities in event-driven and macro strategies WILTSHIRE COUNTY COUNCIL TOTAL AUM $2. 76bn CONSULTANT Mercer ACTIVITY Started searching for multi-asset credit and absolute return fixed income managers 2 5 S E P – 1 OC T 2 01 4 HF MWE E K . COM 9 INVESTOR NEW FIGURES OBTAINED through a Freedom of Information (FOI) Act request on the number of AIFMs outside of Europe that have opted to market into the UK through private placement are sur- prisingly low, say experts. The FCA revealed to sister title HFMCompliance that 491 notification forms had been filed as of 26 August, with 374 using the Article 42 form for full AIFMs and 117 submitting the third-country form. Gary Kaminsky, managing director at ConceptOne, said that with around 3,000 hedge fund investment advisers registered with the SEC alone, “the number seems low”. “I heard that it was less than the FCA was expecting,” said one lawyer who did not wish to be named. The UK regulator declined to comment. “The numbers are much lower than I would have expected – an awful lot are scared to draw themselves into the AIFMD,” said Neil Robson, partner at Katten Munchin Rosenman. “Managers can’t engineer reverse solicitation, although they think they can.” “My sense is the number is lower than expected,” said Simon Thomas, partner at Macfarlanes, although he added the pool of funds actively marketing in Europe was probably smaller than supposed. “What the directive has done is stopped US managers coming to London on the off-chance,” he said. Devarshi Saksena, partner at Simmons & Simmons, said he expected more managers to register once they realised the limits of reverse enquiry in the UK and in other EEA jurisdictions and as the Article 42 compliance process becomes tried and tested. [email protected] MI FI D I I FCA: Mifid transparency should not hit liquidity THE MIFID II GOAL OF increased transparency should not come at the cost of reduced liquidity and must be balanced with the needs of market participants in areas such as data col- lection, according to the FCA. Speaking at a conference on the upcoming European directive in London on Monday, the UK regulator’s director of markets David Lawton set out the diverse range of changes Mifid II would introduce from January 2017. Mifid II is set to bring market transparency to bond and derivatives trading, which will need to take place on exchanges or similar venues. However, Lawton said regulators needed to take care when setting these new rules. “Mifid II weighs in favour of more transparent trading. But important questions remain about how this is done, and in particular how to increase transparency without reduc- ing liquidity,” he said. Under Mifid II best execution proposals a number of new standardised data requirements will be introduced but Lawton said the FCA was aware of industry concerns about the amount of data being collected. He said: “We remain conscious that more disclosure and more transparency is not a panacea – we need to get the balance right and provide market participants with data that they both want and need.” Lawton stressed the FCA backed Esma’s proposals to ban the use of dealing commissions to pay for bespoke research, although he acknowledged this was a “hot-button topic” for some. He also highlighted new plans to govern high frequency trading. “We have to develop a balanced regime that doesn’t throw our markets back into the technological dark- ages, but ensures they are fair and safe for all users in the future,” he added. [email protected] Irish regulator warns over filing failings REGULATORY FILINGS AND the processes around them are inadequate at a number of firms, announced the Central Bank of Ireland after conducting a thematic review of investment firms and fund service providers. The bank noted in a letter to industry earlier this month that relevant staff at some firms could not demon- strate sufficient knowledge of regulatory obligations or the methodologies used, while several companies lacked oversight in the production process. “Firms should review existing procedures to ensure that due care and attention is given to the production, oversight and reporting of all regulatory returns,” said Patricia Dunne, deputy head of investment funds and fund supervision at the bank. [email protected] I REL AND 10 OCT 14 DEALING COMMISSIONS – UK Managers must respond to consultation paper 15 OCT 14 MAD II Consultation closes on draft regulation and implementing technical standards R E G U L A T I O N I N D E X If you would like to comment on any compliance-related news story or development, contact Maiya Keidan, HFMCompliance editor, at [email protected] 9 OCT 14 UK FATCA HMRC to hold town hall meeting on consultation paper 1 OCT 14 NFA Assessment fees for futures and options contracts to be halved each side 30 SEP 14 REGULATION – UK Written evidence must be submitted to House of Lords on financial regulatory framework inquiry Non-EEA AIFMs marketing is ‘lower than expected’ FOI request reveals 491 notification forms filed by 26 Aug AI FMD COMPLIANCE Reinsurance ‘A’ is unlikely, warns Fitch RATINGS AGENCY FITCH HAS warned new hedge funds entering the reinsurance space they are unlikely to receive an ‘A’ insurer financial strength rating. “A big fall in asset values could deplete a hedge fund reinsurers’ capital, putting strain on the company if it coincided with unusually high claims payouts,” said Fitch. It added hedge fund reinsurers may be able to receive an A rating in the long term. THE WEEK A senior SEC official, Andrew Bowden (pictured), has warned that some hedge funds do not give clear accounts of their performance or how they calculate it when communicating with investors. “We’ve seen people passing off past specific recommendations that they never made,” the US watchdog’s Compliance and Examinations Director was quoted as saying by Bloom- berg. The agency is examining data from hundreds of hedge funds forced to disclose data by the Dodd-Frank Act. R ATI NGS PHOTO: SEC/FLICKR 2 5 S E P – 1 OC T 2 01 4 10 HF MWE E K . COM LAUNCHES& CLOSURES L A U N C H A C T I V I T Y OUROBOROS ASSET Manage- ment, a Denver-based firm formed earlier this year, will launch its maiden hedge fund in either January or February, HFMWeek has learned. The offering, named the Ouroboros Fund, will focus on specific market-neutral approaches that involve the use of proprietary algorithmic trading models, reverse momentum-based derivatives trading strategies, long/ short equity strategies, as well as identifying arbitrage opportunities across several markets. Ouroboros is targeting just under $100m for the fund. “With the inception of Ouroboros Fund, we envision a unique platform that will allow us to generate significant risk-adjusted returns, while in turn, generating the capital, in-house, to explore and develop more long- term projects through our private equity operations,” said managing partner David Lazarowitz. The firm’s other managing partners are Joshua Lockwood and J Saint Veltri. Ouroboros AM prepares flagship vehicle Denver-based firm targets up to $100m for of fering L AUNCH Franklin Templeton soft- launches Ucits fund FRANKLIN TEMPLETON HAS soft-launched its first Ucits-registered alternative strategy fund with K2 Advisors, a FoHF manager it purchased in 2012. The Franklin K2 Alternative Strategies Fund will sit within the $922.2bn mutual fund giant’s Luxembourg-domiciled Franklin Templeton Investment Funds (FTIF) SICAV range. In a statement, Franklin Templeton said the fund was soft launched on 15 September as a multi-manager, multi- strategy liquid alternative portfolio. Its objective is to seek capital appreciation with lower volatility than broad equity markets by investing across multiple non-traditional or alternative strategies including long- short equity, relative value, event driven and global macro. The fund will be accessible to investors from mid-October, with a date to be confirmed nearer the time. Franklin Templeton purchased $10bn FoHF K2 Advisors in November 2012 in one of several deals pairing a FoHF manager with a larger non-FoHF firm. A similar acquisition saw Liongate Capital, a London-based FoHF, bought last year by US giant Principal Global Investors. [email protected] L AUNCH If you would like to comment on any start-up-related news story or development, contact Elana Margulies, HFMWeek chief reporter, at [email protected] LAUNCH ACTIVITY CONTINUES ON P13 Lockwood previously founded Lockwood Equity Group, a private equity and investment advisory firm. He has held positions at Bank of America Merrill Lynch, Charles Schwab Investment Advisory and Salomon Smith Barney. Veltri’s background includes working with senior management to develop and market both private and public equity instruments where he helped raise hundreds of millions of dollars for his clients through the launch of IPOs, private placements, and direct participation programs. Lazarowitz most recently worked for Neuberger Berman. [email protected] GONDOR CAPITAL MANAGEMENT AND Lampe, Conway & Co have both opened funds to outside investors in separate moves reported by HFMWeekOnline last week. New York-based Gondor Capital Management has launched onshore and offshore versions of its maiden strategy externally. Gondor Partners, LP and Gondor Partners, Ltd, started trading in May and July last year and employ an equity long/short strategy with an options overlay and trade US listed equities. It is targeting primarily high-net- worth individuals, family offices and state pensions that invest in both emerging and minority-owned fund managers to reach $250m in assets. “The fund is a perfect complement to investors’ portfolios as our performance is best during a sideways market,” said Vincent Au, founder. Prior to setting up Gondor Capital in 2012, he founded Avalon Partners, an investment firm he ran from 1996 until 2011. Lampe, Conway & Co, a New York-based distressed credit hedge fund manager, had opened its third offering to outside investors after launching in February. According to a source, the offering, the LC Capital Targeted Opportunities Fund, is a special situations and distressed strategy that will target primarily endowments, foundations and family offices to reach a capacity of less than $1bn. The LC Targeted Opportunities Fund is managed by Steve Lampe and Richard Conway, who co-founded the firm in 1999. EXTERNAL OPENS SCOPERTA CAPITAL STRATEGY Long/short TMT LAUNCH DATE Jan 2015 MARATHON ASSET MANAGEMENT NAME Marathon Structured Product Strategies Fund STRATEGY Debt LAUNCH DATE Aug 2014 BRIDGEWATER ASSOCIATES NAME Optimal Portfolio Strategy STRATEGY Global macro LAUNCH DATE Sep 2014 PINZ CAPITAL MANAGEMENT NAME Pinz Capital International STRATEGY Event-driven LAUNCH DATE Q3, 2014 2 5 S E P – 1 OC T 2 01 4 HF MWE E K . COM 11 OMNI PARTNERS, A London- based firm managing $830m, is launching its long/short equity product to outside investors after incubat- ing the strategy since January this year. The 10-year-old firm announced the launch of the Omni European ELS fund last week. The strategy, co-managed by Howard Spooner and Hugh Selby- Smith, will focus on European opportunities. Spooner joined last year from Barclays, where he was head of equity trading, while Selby-Smith was recruited from TT International. The strategy will be the fourth Omni has opened to external investors, complementing its event-driven, macro and secured lending funds. “Omni provides experienced professionals like Howard and Hugh with the institutional infrastructure and support that enables them to focus on generating attractive risk adjusted returns,” said Peter Coates, who joined as CEO this year from Lighthouse Partners, where he was head of Europe. “I was provided a blank sheet of paper to design my ideal product, from both a process and risk perspective,” added Spooner in a statement. Read HFMWeek later this month for an exclusive interview with Peter Coates about Omni’s plans for the future. [email protected] [email protected] Regulatory costs and burdens are a tough hurdle to overcome for new UK launches but panellists at last week’s HFMWeek Breakfast Briefing expect a pick-up in activity in the near future. Goldman Sachs’ head of European cap intro Nick Guano, Maples Financial Services director European business development Stephen Lewis, OESA founder Karen Wormald and LTW Capital founder Nabil Kobeissi debated the big themes affecting new launches at the Four Seasons Hotel in London (pictured). THE WEEK Omni Partners launches long/short hedge fund London firm starts fourth strategy as internal offering opens up Eagle Bay Capital lines up new hedge fund EAGLE BAY CAPITAL, a New York- based managed accounts specialist which closed its last hedge fund last year due to high expenses, will launch a successor fund in November. HFMWeekOnline revealed last week the offering will be called Ibis Global Partners and focus on long/ short global macro opportunities, in common with the last fund. That offering, Ibis Fund I, oper- ated for six months last year but shut down due to a high expense ratio. The fund will roll out with $10m. Eagle Bay founder JC Parets, who launched the firm in 2012, is senior editor of financial website AllStarCharts. com and was previously vice-president of investments at Westrock Advisors for six years until 2010. Service providers include Kleinberg Kaplan Wolff Cohen, Apex Fund Services, TD Ameritrade and Mike Coglianese. [email protected] City Financial is planning to launch a second hedge fund in Asia and is currently on a hiring drive for its Hong Kong-based office, Reuters reported last week. New York-based start-up Pagoda Asset Man- agement, founded by ex-Highbridge Capital manager Adam Bernstein, has hired a seven-person team and looks set to start trading on 1 October. The scions of a number of wealthy families, including the sons of prominent Wall Street figures Howard Marks and Ken Moelis, have either recently launched hedge funds or plan to do so soon, the WSJ reported last week. Former Catlin Group and Goldman Sachs manager Dhruv Narain is reportedly raising money for a new hedge fund management firm and plans to launch around 1 January. Chicago-based Peak6 Investments is selling its ownership stake in its $2.3bn hedge fund unit , which is spinning out as a new re-named firm named Achievement Asset Management. LAUNCHES IN BRIEF SPONSORED BY L AUNCHES & CLOSURES I N B R I E F L AUNCH L AUNCH CONTINUES ON P13 CT INVEST STRATEGY European equities LAUNCH DATE Q4 2014 CITY FINANCIAL INVESTMENT CO. STRATEGY Long/short Chinese stocks and pan-Asian corporate bonds LAUNCH DATE TBD C-VIEW NAME C-View Stelrox Systematic Currency Strategy STRATEGY Currency LAUNCH DATE Sep 2014 WHITEBOX ADVISORS NAME Whitebox Special Opportunities Fund E STRATEGY Debt LAUNCH DATE Oct 2014 EAGLE BAY CAPITAL NAME Ibis Global Partners STRATEGY Long/short global macro LAUNCH DATE Nov 2014 STRATEGY SPOTLIGHT OMNI EUROPEAN ELS’S PORTFOLIO has three stages – base, trading and opportunistic. Stocks initially selected for the base portfolio, which aims to be market and sector neutral, are whittled down on a discretionary basis. This results in between 40 and 50 stocks covering between nine and 11 sectors, which are then sized up or down in the trading book. The opportunistic portfolio is precluded from owning more than three single-stock, sector-specific or thematic views at any given time. SOURCE: Omni SEARCH ACTIVITY 1 2 HF MWE E K . COM 2 5 S E P – 1 OC T 2 01 4 A WEEKLY COMPENDI UM OF RECENT HEDGE FUND SEARCHES AND I NVESTMENT MANDATES S E A RC H A C T I V I T Y AURORA INVESTMENT MANAGEMENT TOTAL AUM $9.1bn ACTIVITY Mulling increased exposure to “portfolio hedge” strategies. Also researching bank merger space JUL 2014 SAN JOSE FEDERATED RETIREMENT SYSTEM TOTAL AUM $2.5bn CONSULTANT Albourne ACTIVITY Issuing mandate to hedge fund manager worth 5% of overall investment portfolio KAZAKHSTAN NATIONAL INVESTMENT CORPORATION TOTAL AUM $110bn (approx) ACTIVITY Issued RFP for hedge fund consultant to take on $300m mandate MORGAN STANLEY WEALTH MANAGEMENT TOTAL AUM $1.9trn CITY OF MOBILE POLICE & FIRE RETIREMENT PLAN TOTAL AUM Not disclosed CONSULTANT Gray & Company ACTIVITY Considering up to four managers for possible investment EL PASO COUNTY RETIREMENT PLAN TOTAL AUM $319m CONSULTANT Watershed Investment Consultants ACTIVITY Heard recommendations on potential FoHF managers at August meeting ACTIVITY Seeking long/short, event- driven and relative value managers ILLINOIS STATE UNIVERSITIES RETIREMENT SYSTEM TOTAL AUM $16.4bn CONSULTANT NEPC ACTIVITY Planning to issue an RFP in its first search for hedge funds PENNSYLVANIA TURNPIKE COMMISSION TOTAL AUM $6.8bn CONSULTANT Investment Perfor- mance Services ACTIVITY Searching for a FoHF manager for a mandate of around $13m DEUTSCHE ASSET & WEALTH MANAGEMENT (DEAWM) TOTAL AUM $137.5bn ACTIVITY Could add emerging market managers to its panel Continued from page 8, compiled by HFMWeek AUG 2014 TEXAS ERS TOTAL AUM $21bn CONSULTANT Albourne ACTIVITY Seeking two directional growth hedge fund managers to invest up to $250m each CARNEGIE MELLON UNIVERSITY TOTAL AUM $1.07bn ACTIVITY Looking to hire two or three HFs running relative value and market neutral strategies in the next six months To comment, contact Alex Cardno at [email protected] Ihi: mcrkeling infcrmclicn i: inlencec fcr prcfe::icnc| c|ienl: {c: cefnec in lhe g|c::cry cf lhe FC/ HcncLcck) cn|y cnc |evercgec EIF: cre :uilcL|e fcr fncncic||y :cphi:licclec inve:lcr:. lf ycu wi:h lc recc cur fu|| ci:c|cimer p|ec:e vi:il: www.boostetp.com/Content/Disclaimer B O O S T F T S E 1 0 0 3 X S H O R T D A I L Y E T P ( 3 U K S ) B O O S T F T S E 1 0 0 3 X L E V E R A G E D A I L Y E T P ( 3 U K L ) +44 (0)20 3207 9050 [email protected] boostetp.com/UKad 40 equity & commodity LSE listed ETPs No margin calls Trades on LSE Can’t lose more than original investment No complex documentation Low cost, robust & transparent 2 5 S E P – 1 OC T 2 01 4 HF MWE E K . COM 13 LAUNCH ACTIVITY A WEEKLY COMPENDI UM OF HEDGE FUND L AUNCH ACTI VI T Y L A UNC H A C T I V I T Y EATON VANCE NAME Eaton Vance Richard Bernstein Market Opportunities Fund STRATEGY Macro LAUNCH DATE Q3, 2014 GREY INVESTMENT MANAGEMENT NAME Grey Value Opportunity Fund STRATEGY Value-oriented equity LAUNCH DATE Oct 2014 ZAFIRO CAPITAL NAME Zafiro Capital Commodities Trading Fund STRATEGY Fundamental discretionary commodity LAUNCH DATE Q4, 2014 SILVER RIDGE ASSET MANAGEMENT STRATEGY Global macro LAUNCH DATE Q1, 2015 HARTFORD FUNDS NAME Long/Short Global Equity Fund STRATEGY Liquid alternative long/ short fund LAUNCH DATE Q3, 2014 HORSEMAN CAPITAL MANAGEMENT NAME Horseman European Select UCITS Fund STRATEGY Ucits-compliant European long/short equity LAUNCH DATE Sep 2014 CLOVERDALE CAPITAL STRATEGY Long/short equity LAUNCH DATE Oct 2014 SOROBAN CAPITAL PARTNERS NAME Soroban Opportunities Fund STRATEGY Concentrated, “best ideas” long/short equity LAUNCH DATE Aug 2014 SANDITON ASSET MANAGEMENT NAME TM Sanditon European Select STRATEGY Europe-focused long/short equity Ucits ALGEBRIS INVESTMENTS STRATEGY Buy non-performing loans in Italy LAUNCH DATE TBD THEMIS MANAGEMENT NAME Themis Legal Capital STRATEGY Specialty finance LAUNCH DATE Q4, 2014 LESTE STRATEGY Risk arbitrage, credit, distressed LAUNCH DATE TBD OURAY MANAGEMENT STRATEGY European equities LAUNCH DATE Nov 2014 SHADOW TREE CAPITAL NAME Shadow Tree Income Fund B STRATEGY Direct lending LAUNCH DATE Oct 2014 CAHERA CAPITAL STRATEGY Equities LAUNCH DATE Q4, 2014 BROOKFIELD ASSET MANAGEMENT NAME Brookfield Event-Driven Op- portunities Fund STRATEGY Event-driven LAUNCH DATE Sep 2014 ADVANTAGE CAPITAL MANAGEMENT STRATEGY Special situations fund LAUNCH DATE Oct 2014 Continued from pages 10&11, compiled by HFMWeek REPORTED SEPTEMBER 2014 361 CAPITAL NAME 361 Global Long/Short Equity Fund STRATEGY Long/short equity mutual LAUNCH DATE Sep 2014 OUROBOROS ASSET MANAGEMENT NAME Ouroboros Funds STRATEGY Market neutral LAUNCH DATE Q1, 2015 PAGODA ASSET MANAGEMENT NAME TMT and consumer-focused STRATEGY Long/short equity LAUNCH DATE Oct 2014 SAGAT CAPITAL NAME Systematic Diversified Programme STRATEGY CTA LAUNCH DATE TBD VIRTUS INVESTMENT PARTNERS NAME Virtus Strategic Income Fund STRATEGY Alternative income LAUNCH DATE Sep 2014 OLD HILL PARTNERS STRATEGY Specialty finance LAUNCH DATE Q3, 2014 BEACH HORIZON STRATEGY Ucits-compliant directional managed futures LAUNCH DATE Oct 2014 SEVEN SAGES CAPITAL STRATEGY Global macro LAUNCH DATE TBD To comment, contact Elana Margulies at [email protected] COMMENT&ANALYSIS THE LONG VIEW E arlier this month, the CFTC issued certain important exemptive relief and further guidance in response to numerous industry participant requests to consider harmonising certain CFTC regulations with SEC rules implementing the Jobs Act. These SEC actions (i.e. the issuance of new Rule 506(c) under the Securities Act) elimi- nated a prohibition on general solicitation and advertising for certain offerings made under Rule 506 of Regulation D of the US Securities Act of 1933 and for certain offerings made pursuant to Rule 144A under the Securities Act. The SEC’s actions with respect to the Jobs Act had led some commentators to contem- plate managers of private equity, hedge and other private funds availing themselves of widespread advertising, including television, radio and public transportation advertising, to attract potential investors. Despite such predictions, few private fund managers have availed themselves of these options. One such reason was certain restric- tions set forth in CFTC regulations. Because many private fund managers, or affiliates thereof, engage in commodity inter- ests transactions (which include most swaps transactions) with respect to the private funds that they manage, such persons fall under the regulatory purview of the CFTC, and, therefore, generally must register as commodity pool operators (CPOs) and/or commodity trading advisers (CTAs), or avail themselves of applicable exemptions from such requirements. Private funds managers (or their affiliates) that rely on CFTC Regulation 4.7(b) or CFTC Regulation 4.13(a)(3) and that con- templated engaging in a Rule 506(c) offering had previously faced a seemingly insurmount- able dilemma imposed by these CFTC regulations. The CFTC guidance provides limited exemptive relief from regulatory contradic- tions by harmonising regulations with Rule 506(c) under the Securities Act in certain cir- cumstances. In order for a CPO to claim this exemptive relief, the guidance provides that certain conditions must be met by the CPO, including manual submission to the CFTC of a claim for exemptive relief. While CTAs are not sponsors of private funds and would, therefore, not engage in a Rule 506(c) offering, the guidance may indi- rectly benefit certain CTAs. For instance, CTAs relying on the registration exemption provided by CFTC Regulation 4.14(a) (8) (which, among other things, provides an exemption from registration for certain CTAs that solely advise CPOs relying on CFTC Regulation 4.13(a)(3)) would still be eligible for such exemption if any such advised CPO engages in a Rule 506(c) offering. Although the guidance was welcomed, there are still questions as to whether such actions will marshal in a new era of private fund public solicitation and advertising due to remaining hurdles such as: · additional administrative steps to satisfy investor sophistication requirements under Rule 506(c), which may provoke adverse reactions from potential investors due to the personal information that would be required to satisfy these steps; · costs of complying with the verification requirements and the costs of widely dis- seminated advertisements in relation to the expected amount of investor inflows may not be cost-effective; · potential legal complexities and uncertain- ties if managers choose to engage in a Rule 506(c) offering with respect to one or more of the private funds that they manage, while simultaneously engaging in a Rule 506(b) offering (which does not per- mit general solicitation and advertising) with respect to one or more other funds; · questions with respect to the scope of permissible content of general solicitation and advertising materials (e.g., performance content), which may limit the effectiveness of such materials; · heightened regulatory scrutiny due to the increased visibility brought on by a 506(c) offering; and · pending SIC rules, such as a proposed marketing materials submission requirement, which also would bring greater regulatory scrutiny and that may dissuade such managers from engaging in a Rule 506(c) offering. SCOTT MOSS, partner at Lowenstein Sandler T he decision by the California Public Employees’ Retirement System (Calpers) to pull $4.5bn of hedge fund investment has garnered plenty of headlines but there is little evidence it will spark a wave of similar activity. Bob Jacksha, CIO of the $11bn New Mexico Educational Retirement Board conveyed the views of many when he told me: “What Calpers does is what Calpers does and has absolutely no bearing on what we do”. Calpers’ decision was based on concerns about fees and investment complexities. These are worries managers will be used to hearing from investors but also something to keep an eye on. The CIO of another $12bn public pension fund says: “I’m sure this event will bring on a future policy-level dis- cussion. That said, the general conclusion of our staff is that we’re getting what we pay for at present.” The State Employees’ Association of North Carolina is pressurising State Treasurer Janet Cowell to withdraw the $288m the state retirement system has invested in hedge funds and there is bound to be more political noise. However, many other US public pension funds I’ve spoken to recently are maintaining hedge fund allocations, with some increasing them. Rather than a stampede out of hedge funds, a more likely trend is a growing number of pension funds looking to treat hedge funds as possible investments across their portfolio, rather than in a specific ‘alternatives’ bucket. Calpers’ size, $300bn, sets it apart. Pete Tirp, CIO of Kern County Employees’ Retirement Association, estimates it would have needed to invest $10bn to have a meaningful impact on returns. “There aren’t that many elite hedge funds out there that you can just sock $10bn into,” he adds. THE SHORT VIEW ALEX CARDNO [email protected] 2 5 S E P – 1 OC T 2 01 4 1 4 HF MWE E K . COM THERE ARE STILL QUESTIONS AS TO WHETHER SUCH ACTIONS WILL MARSHAL IN A NEW ERA OF PRIVATE FUND PUBLIC SOLICITATION AND ADVERTISING ” SCOTT MOSS Clarif ying CFTC exemptive relief and guidance WE HAVE TO DEVELOP A BALANCED REGIME THAT DOESN’T THROW OUR MARKETS BACK INTO THE DARK-AGES David Lawton, director of markets at the FCA, on the challenge ahead with Mifid II and HFT CURRENT LEVERAGE STRATEGIES ARE TOO RISKY AND ARE NOT YIELDING THE RESULTS THAT WERE ANTICIPATED Retiree Phyllis Elkind speaks out as San Diego’s CERA pension decides outsourced CIO Lee Partridge’s future WE BELIEVE THIS ACQUISITION IS A PERFECT MATCH Throgmorton CEO Andrew Rubio on his company’s sale to Capita Asset Services London Third Floor Thavies Inn House 3-4 Holborn Circus London, EC1N 2HA T+44 (0)20 7832 6500 F +44 (0)20 7832 6501 New York 1441 Broadway Suite 3024 New York, NY 10018 T +1 (212) 268 4919 EDITORIAL Head of content Paul McMillan +44 (0) 20 7832 6622 [email protected] News editor Will Wainewright +44 (0) 20 7832 6624 [email protected] Data and online editor Rob Langston +44 (0) 20 7832 6626 [email protected] Chief reporter Elana Margulies +1 (212) 268 4944 [email protected] Investment editor Alex Cardno +44 (0) 20 7832 6625 [email protected] Senior reporters Matt Smith +44 (0) 20 7832 6627 [email protected] Maiya Keidan +44 (0) 20 7832 6621 [email protected] Reporter Jasmin Leitner +44 (0) 20 7832 6657 [email protected] Technology correspondent Chris Matthews +44 (0) 20 7832 6656 [email protected] Data manager Indira Peters-DiDio +1 (212) 268 4919 [email protected] COMMERCIAL Associate publisher Lucy Churchill +44 (0) 20 7832 6615 [email protected] Senior publishing account manager Tara Nolan +44 (0) 20 7832 6612 t [email protected] Publishing account manager Joakim (Joe) Nilsson +44 (0) 20 7832 6616 [email protected] Publishing account manager Jack Duddy +44 (0) 20 7832 6613 [email protected] THE MEMBERSHIP TEAM +44 (0) 20 7832 6511 [email protected] PRODUCTION Head of production Claudia Honerjager Sub-editor Rachel Kurzfield Designer Jack Dougherty PAGEANT MEDIA Group head of content Gwyn Roberts +44 (0) 20 7832 6623 [email protected] Chief executive Charlie Kerr ISSN 1748-5894. Printed by The Manson Group. © 2014 all rights reserved. No part of this publication may be reproduced without written permission of the publishers. No statement in this magazine is to be construed as an invitation to invest in hedge funds. Former PB forecasts smokin’ future Hopes ‘biggest business experiment of the 21st century’ will drive exchange Leading the way – in the wrong direction Better late than never for partner who got lost on way to HFM leaders’ summit W e hear about staff from prime brokers spinning off and launching their own hedge funds. But one former PB is hoping to make a name for himself through a rec- reational activity more than likely to leave your head spinning. “America’s emerging cannabis industry is shaping up to be the country’s biggest business experiment of the 21st century,” begins a press release penned by Amercanex, which describes itself as the “first fully electronic marketplace exchange for the cannabis industry”. The venture is the brainchild of Steve Janjic, whose CV includes stints at Morgan Stanley, Gain Capital and ACM. With cannabis now decriminal- ised in a number of US states, he hopes he’s spotted a great opportunity to roll out a “Wall Street- like” digital commodities exchange system. It will allow market participants to monitor and track orders, activities and transactions and help growers and retailers to calculate and deduct fees and taxes. A real-time interface will offer users best sell/buy prices, which it hopes will stimulate competition and lower costs in this burgeon- ing new legalised industry. Market forces driving down costs so ston- ers then have more money to spend on their munchies? We’re sure the likes of Ayn Rand and Ronald Reagan would be truly proud. T he great and the good of the European hedge fund sector gathered at The Grove hotel in Hertfordshire, England, last week for the HFMWeek operational leaders summit, although some guests took slightly longer to get there than others. The hotel (pictured), so in demand that even the profligate UK financial regulator decided to treat its board members to a £15,000 stay last year, is located a convenient 20 miles north of London. However, a partner of a notable UK hedge fund unfortunately didn’t get the memo and ended up at the location of last year’s summit, some 30 miles south of London at Pennyhill Park in Surrey. To spare their blushes, and avoid any physical retribution, The Inside Hedge will be keeping the name of the embarrassed manager under wraps. Suffice to say they managed to make it up to Hertfordshire in the end to get involved in the heat- ed industry debates and insightful discussions, alongside a hotly con- tested golf competition and a bit of crossbow and archery action. T h e I n sid e H ed g e ANY INSIDE INTEL? TIP US OFF AT: [email protected] THE WEEK IN QUOTES 2 5 S E P – 1 OC T 2 01 4 HF MWE E K . COM 15 2 5 S E P – 1 OC T 2 01 4 16 HF MWE E K . COM 2 0 F O R 2 0 1 5 As confidence in the hedge fund start-up market builds, HFMWeek examines the pipeline and lists the 20 freshest launches generating most interest among investors BY WILL WAINEWRIGHT FEATURE 20 FOR 2015 hedge funds has been helped in particular by the emergence of new seeding ventures.” But while this year’s list features seeding activity from names ranging from Blackstone to Leucadia National Corp, many prime brokers believe seed deals have become less important in the last couple of years. “Founders share classes are becoming much more prevalent and are largely the preferred option,” says Malik. As with the wider industry, long/short equity dominates the strategy composition of the list. “Equity long/short is certainly du jour,” adds Malik. “It is the strategy of choice for investors and also where you are seeing the largest, most high-profile and best-pedigreed start-up managers.” The majority of the ‘20 for 2015’ managers have come from other hedge funds as opposed to banks. “Investors have more confidence in the ‘been there done that’ credentials of managers who have been PMs at other hedge funds, but a few continue to make it from other backgrounds,” says Davey. A senior prime broker in London says the failure of Goldman Sachs spinout Edoma Partners, which was Europe’s biggest post-2008 hedge fund launch, has not helped the reputation of bank spinouts. “Managers need the three Ps: pedigree, performance and product,” says Malik. “That gets you in the door. But these managers from brand-name hedge funds fall into two categories – those who were investor facing and those who weren’t. The cream of the crop money managers built LP relationships, and investors were able to build trust in them and their processes. “Investors are much likelier to come in day one to those managers. It separates the $100m launch from the $1bn launch.” That assets total, as ever, remains the Holy Grail for new hedge fund launches. The next 12 months will determine how many of this year’s crop reach it. T he post-crisis era has proved challenging for new hedge funds, but industry participants have become notably bullish about the start-up market. “We are in the most robust hedge fund start-up market since the crisis – the days of the $1bn launch are well and truly back,” claims Omeed Malik, who heads Bank of America Merrill Lynch’s emerging manager programme and US prime brokerage distribution. “It feels exactly the same here,” says Carl Davey, who runs hedge fund sales for Citi Investor Services in Asia. “We are seeing a good number of new firms led by pedigreed managers, who are building ‘institutional-grade’ infrastructures and attracting significant day-one capital.” The positivity seems to be borne out by the numbers, with several constituents of last year’s list of new hedge funds raising more than $1bn, and at least one – Herb Wagner’s Finepoint Capital – surpassing $2bn. Sources say a “perfect storm” of factors have combined to provoke the uptick in interest, all of which have impacted HFMWeek’s latest round-up. The downsizing of SAC Capital Advisors, since re-named Point72 Asset Management, and closure of Ziff Brothers’ hedge fund investing unit have both had big impacts. Four constituents of this year’s list are being launched by managers who previously held senior positions at Ziff, while three worked at Point72. A further three new firms recently launched by SAC alumni in the UK – Ayora Capital Management, Pagliaro Capital Management and HSE Capital Management – have also generated headlines, but did not make the list. Observers say another factor swelling the launch numbers for new firms is the fact that many brand-name hedge funds are closed to new money, improving the appeal of new hedge funds started by alumni of those firms. “A number of higher- profile managers here in Asia are soft-closed to new money, which has provided opportunities for new launches to enter the market,” adds Davey. His colleague Carol Teng, who works for Citi’s cap intro team, adds that the rise of new seeding efforts such as HS Group has boosted the market. “The fundraising environment for new Asian ABBERTON CAPITAL MANAGEMENT FOUNDER: Fredrik Juntti FOUNDED: April 2014, London One third of the founding trio behind Montrica Investment Management, a pre-crisis success story later swallowed up by TPG Axon, Juntti is returning with Abberton Capital Management, a highly tipped London-based start-up. His earlier co-founders are coincidentally also launching ventures this year – Svein Hogset with Incentive AS in Norway and Andrew Metcalfe with Lakefour Investment Management in Switzerland – but sources say Abberton looks set to raise the most backing. Meditor Capital Management COO Craig Simkins has been brought on to run operations for Abberton, an activist investment firm, which was planning to launch next quarter with assets of around $200m. 2 5 S E P – 1 OC T 2 01 4 HF MWE E K . COM 17 ARAVT GLOBAL FOUNDER: Yen Liow FOUNDED: October 2013, New York After launching early this year, Liow is now running more than $1bn with Aravt, which was the first large- scale launch to emerge from the closure of Ziff Brothers’ hedge fund investing unit. Liow spent 12 years at the family office, where he managed a range of long/short equity investments ranging from global media and telecoms to agricultural commodities and energy. His COO is Thomas Hoban, who has worked for a range of firms including Vinik Asset Management and Signpost Capital. ARKKAN CAPITAL MANAGEMENT FOUNDER: Jason Brown FOUNDED: December 2013 (SFC registration), Hong Kong The long-awaited start-up from Brown, who led global special situations investing for Goldman Sachs, was reported earlier this month to have won backing worth up to $200m from Blackstone. A prime broker says the offering, which started trading in August, is the biggest new bank spinout in Asia. It follows Senrigan Capital Group as only the second new Asian hedge fund to win Blackstone’s backing since the financial crisis. BANBURY PARTNERS FOUNDERS: Baker Burleson, Stormy Scott FOUNDED: April 2014, Charlotte, N Carolina Burleson and Scott – two managers previously with ‘ Tiger cub’ firms – have joined forces to launch what could be termed the ultimate ‘ Tiger grand-cub’. Burlseson is CIO of the new long/short equity venture after eight years with Fox Point Capital Management, while Scott is president and COO after seven years with Hound Partners. Their new venture was reportedly targeting a $300m fundraise for its launch next quarter. BOSVALEN ASSET MANAGEMENT FOUNDER: Ken Xu FOUNDED: August 2014 (SFC registration), Hong Kong Xu left the Asia office of Steve Cohen’s Point72 Asset Management earlier this year and is preparing a hedge fund generating considerable buzz among industry participants in the region. The Och-Ziff and Goldman Sachs alumnus managed money for more than three years at SAC/Point72 and is preparing a long/short equity firm. “That is the Point72 spinout generating the most interest in Asia,” says one manager. Another former SAC manager generating interest with a new Asian hedge fund is Andrew Bazarian. DARSANA CAPITAL PARTNERS FOUNDER: Anand Desai FOUNDED: January 2014, New York Former Eton Park manager Desai raised more than $1bn for the launch of Darsana in June, making it one of the year’s most successful launches. A service provider describes the launch as “a thing of beauty” in terms of its institutional build-out and success with investors, adding that Desai could have raised more had he wished. Desai spent nine years at Eton Park having worked for Eric Mindich’s firm since its 2004 launch. Former colleagues Dan Irom and George Saalouke were among his recruits at Darsana, which deploys a long/short equity strategy. FOLGER HILL ASSET MANAGEMENT FOUNDER: Sol Kumin FOUNDED: August 2014, New York and Boston Kumin was at SAC Capital for a decade until leaving his role as COO earlier this year to launch Folger Hill. His planned firm has secured one of the year’s biggest seeding deals from Leucadia National Corp, which has agreed to allocate $400m if Kumin can match that sum with contributions from elsewhere. The company will reportedly get almost half of Folger Hill in return for the commitment. Todd Rapp left his role as chief risk officer at Highfields Capital Management to co-found the firm. It hopes to raise a total of more than $800m to be allocated among different trading teams. IMMERSION CAPITAL FOUNDER: Michael Sidhom FOUNDED: April 2014, London Sidhom is lining up Immersion with guaranteed backing from his former employer, Ziff Brothers, making it one of the London market’s most- tracked start-ups. He spent almost a decade managing money for the family office’s Europe office and was one of its most senior managers. Jim Kandunias, the former Esemplia COO, has been hired to lead a new operations team but Sidhom has brought his investment team over to Immersion, an equities-focused venture. Ziff Brothers became a force in the hedge fund space despite not accepting outside money – meaning the new wave of start-ups from ex-Ziff talent opens them up to investors widely for the first time. A senior prime broker says Sidhom’s ex-colleague David Fear, who was Ziff’s most senior manager in Europe, is another one to watch. Fear registered a name – Thunderbird Partners – in May and given his calibre can expect to raise at least as much as Sidhom from Ziff and other investors. KONTIKI CAPITAL MANAGEMENT FOUNDER: Gregard Heje FOUNDED: April 2014 (SFC registration), Hong Kong The closure of the Ziff Brothers hedge fund unit makes its presence felt in Asia too, with the family office’s former head of investing in the region behind one of Asia’s most-tipped hedge fund start-ups. Heje spent almost a decade at Ziff and has been backed by them for his pan-Asia long/short equity fund. “Kontiki is generating a lot of interest, no question,” says a prime broker in the region. MELVIN CAPITAL FOUNDER: Gabriel Plotkin FOUNDED: April 2014, New York Plotkin is leading one of a clutch of new hedge funds to emerge from the SAC/Point72 stable. What makes Plotkin’s venture stand out is the $200m backing he has reportedly won from his former boss Steve Cohen, who at times entrusted him to manage more than $1bn of his firm’s capital. A prime broker says Cohen’s backing is “very unique” and considerably enhances Plotkin’s chance of success. “The average SAC spinout has a lot of difficulty because of the reputation,” the person adds, referring to the dam- age done to SAC by repeated insider trading scandals. Plotkin named his firm after his grandfather, it emerged this summer. PAGODA ASSET MANAGEMENT FOUNDER: Adam Bernstein FOUNDED: May 2014, New York Bernstein was a portfolio manager at Highbridge Capital Management for almost nine years before leaving in March to build Pagoda, which will deploy a long/short equity strategy for its launch next quarter. He has brought Mark Hoffman, an 11-year Highbridge veteran who headed up global equity trading, with him as COO. Bernstein led Highbridge’s investing effort in the technology, media, telecommunication (TMT) and consumer sectors. A prime broker said that pedigree gives Pagoda a good chance of success. PERDURANCE ASSET MANAGEMENT FOUNDER: Ivan Briery FOUNDED: March 2014, Jersey Briery was a star of the industry’s pre-crisis era, making millions with Voltaire Asset Management, the firm he co-founded in 1997 with Laurent Saglio, who went on to found Zadig Asset Management. Their timing was perfect, as for eight years the pair scored bumper returns before closing well before the financial crisis hit – allowing Frenchman Briery to retire at the age of 40 to “devote myself to my family”. However, the one-time Soros manager is making a comeback with Jersey-based Perdurance with potential launch assets thought to be in the region of $500m. PLEIAD INVESTMENT ADVISORS FOUNDER: Ken Lee and Michael Yoshino FOUNDED: June 2014 (SFC registration), Hong Kong Former Asia specialists for Soros Fund Management, Lee and Yoshino have joined forces to start a new firm trading Asian equities. Pleiad Investment Advisors won backing from the HS Group, one of several seeding firms improving the fundraising picture for Asian hedge funds. The founders also worked together at Tiger Asia Management, making this another new firm with links to Julian Robertson’s hugely influential hedge fund firm. HS Group is part-owned by TPG Capital and was set up by ex-Blackstone and Goldman Sachs professionals. PRIMESTONE CAPITAL FOUNDER: Franck Falezan, Benoît Colas and Jean-Pierre Millet FOUNDED: March 2014, London Few impending launches – not just in Europe but globally – can beat Primestone for pedigree. The trio behind one of London’s most 2014 US HE DGE F UND PE RF ORMANC E AWARDS October 23, Cipriani 42nd St, New York ENTRY ENQUIRIES Indira Peters (212) 268-4919 [email protected] TABLES/SPONSORSHIP ENQUIRIES Lucy Churchill +44 (0) 20 7832 6615 [email protected] THE PI NNACL E OF PERFORMANCE www.hfmweek.com/events SPONSORED BY BOOK YOUR PLACE TODAY 2 5 S E P – 1 OC T 2 01 4 HF MWE E K . COM 19 FEATURE 20 FOR 2015 closely-watched launches have all had long and senior careers with The Boston Consulting Group and more recently Carlyle Group. Millet was founder of the private equity giant’s Europe office. It describes itself as a “constructive active manager” and will target companies in the European mid-cap space. It expects to launch next quarter with between $400m and $600m – including hefty contributions from the founders. UBS is prime broker for the fund, which will not short securities. “The real deal,” says one prime broker who is not working with the firm. “You just know they will do well.” SAFERIDGE CAPITAL PARTNERS FOUNDER: Paul Saferstein FOUNDED: May 2014, New York Saferstein is setting up Asia- focused Saferidge after eight years with Asian Century Quest Capital, which is closing down after redemptions shrank the business from a $2bn peak in 2012. His launch, scheduled to start trading in Q4, will make long/short equity investments across Asia but have a particular focus on Japan. The closure earlier this year of Joho Capital, a $5bn New York hedge fund focused on Asia, left a gap in the space and will help Saferstein generate interest, according to one industry observer. SENTINEL DOME PARTNERS FOUNDER: Munir Alam FOUNDED: February 2014, San Francisco Tipped by one prime broker as potentially the “biggest West Coast launch of 2014,” Sentinel Dome is being set up by an eight-year veteran of Farallon spinout Watershed Asset Management. Alam was co-portfolio manager and managing member there before leaving in January this year to launch his new firm, which will make event-driven investments across the capital structure. SEVEN HARBOUR GLOBAL FOUNDER: Sean Grogan FOUNDED: October 2013, New York The new firm being set up by Grogan, who spent almost six years at Conatus Capital Management , has generated multiple headlines this year with hires that indicate his start-up firm Seven Harbour has grand ambitions. Rob Sachs was recruited to lead business development from Bank of America Merrill Lynch, where he headed global cap intro, while CFO Jay Maymudes was prised away from Wexford Capital after almost 20 years. Like several on this list , Seven Harbour deploys a long/ short equity strategy. SOPHOS CAPITAL MANAGEMENT FOUNDER: Jim Carruthers FOUNDED: November 2013, New York Carruthers is a former partner of Third Point founder Dan Loeb, which goes some way to explaining why his plan to launch a short-bias hedge fund has been generating buzz among investors. “I can tell you that I think he’s got the real stuff,” says one prime broker, adding that the short-bias strategy makes it stand out to investors. He spent eight years managing money for Third Point, which was recently reported to have quickly raised a further $2.5bn. If Carruthers can tap into that appetite, he could lead one of this year’s largest launches with Sophos, which was planning to launch in the second half of 2014. SQUAREPOINT FOUNDERS: Gregoire Schneider, Olivier Durantel, Maxime Fortin and Antoine Fillet FOUNDED: May 2014, London The spinout of the nQuants systematic trading unit from Barclays has generated much attention in industry circles this year. Key individuals involved in the project incorporated the name Squarepoint in London in May, although the venture is reportedly planning to have offices globally with around 60 employees. It is understood Barclays supports the breakaway of the unit into a new firm although it will reportedly not seed or take a stake in the venture. Chris Newman has been brought on board after almost 20 years at Millennium Management , where he was head of operations. TWO CREEKS CAPITAL MANAGEMENT FOUNDER: Ryan Pedlow FOUNDED: 2014, New York Pedlow was reported by the Wall Street Journal to have raised $1.5bn for its launch this summer, making it one of the biggest hedge fund launches since 2008 and the largest offering to emerge from the Ziff Brothers stable. Pedlow was a key stocks manager at the New York-based family office and his new firm is also equities-focused. The fund charges fees of 1.5/20, according to its SEC bro- chure. Former Tiger, Viking and Saba executive Carl Casler was appointed CFO while Richard Wandner, who spent 12 years at Viking, is head of operations. WHERE ARE THEY NOW? THE CLASS OF 2014 Anderson Global Macro: Macro firm founded by Keith Anderson, formerly a BlackRock and Soros heavyweight, now manages $600m. Argentière Capital: Deepak Gulati’s Switzerland-based firm now manages $600m. Canosa Capital: Tim Attias and Santiago Alarco’s macro fund was the only European firm out of last year’s batch to raise more than $1bn and now manages $1.045bn. East Lodge Capital: Most recent reported asset figure for ex-CQS manager Ail Lumsden’s firm was around $500m. Finepoint Capital: The biggest launch on last year’s list, ex-Baupost manager Herb Wagner is reported to have attracted launch assets in the region of $2bn. Foxhaven Asset Management: Michael Pausic founded one of last year’s most-tipped launches after 16 years with Maverick. Latest AuM unknown. Junto Capital Management: Ex-Viking manager Jim Parsons was said to have launched in January with around $500m. Nettleton Capital: Former Eton Park star Rob Dafforn won launch backing of around $150m from Blackstone. Latest AuM unknown. Nordkinn Asset Management: The Scandinavian firm now manages $160m after launching last year. Princeton Alpha Management: Shakil Ahmed won backing from Blackstone worth $250m on launch last year. Latest AuM unknown. Rock Springs Capital: One of the list’s smaller constituents, former T. Rowe Price manager Kris Jenner reportedly launched with $100m last year. Latest AuM unknown. Roystone Capital Management: Founder Rich Barrera quickly raised around $400m last year. Latest AuM unknown. Salt Rock Capital Partners: Former Caxton Associates manager Mark Painting now manages more than $300m in his London-based start-up. Sarissa Capital Management: Alex Denner, previously a senior manager at Icahn Associates, launched with backing from Meritage Group last year. Latest AuM unknown. Stewart Asia Investment: Ex-Tudor manager Andrew McMillan launched Stewart Asia in Singapore last year. Latest AuM unknown. Symmetry Investment Management: Industry sources regard the Millennium-backed start-up, which attracted more than $1bn, as Asia’s biggest recent hedge fund launch. Three Bays Capital: Matthew Sidman, formerly of Highfields Capital, launched Boston- based Three Bays on 1 January and assets have reached $1.5bn. Tse Capital Management: Irene Tse’s firm was said to launch with around $450m last year. Latest AuM unknown. Waterfront Capital Partners: Eduardo Abush departed Millennium Management to launch Waterfront. Latest AuM unknown. Wingspan Investment Management: After launching last year, Buckley Ratchford’s New York firm now manages $835m in its flagship macro fund. CRITERIA To qualify for consideration, hedge fund management firms must have been registered in the 12 months between 1 September 2013 and 31 August 2014 (in Asia, the SFC registration date was used). The chosen 20 are those deemed most likely to achieve significant future success, based on conversations with a diverse range of senior industry professionals and HFMWeek’s editorial judgement. 20 HF MWE E K . COM FEATURE JOBS ACT 2 5 S E P – 1 OC T 2 01 4 DON STEINBRUGGE, AGECROFT PARTNERS IT DEPENDED ON WHAT LAW FIRM YOU SPOKE TO – SOME LAW FIRMS PREVIOUSLY DID NOT FEEL COMFORTABLE WITH HEDGE FUNDS PUTTING ANYTHING OUT THERE ” Despite the CFTC’s recent shift to allow general solicitation, lawyers say take-up of the Jobs Act’s advertising flexibilities is likely to be limited BY MAIYA KEIDAN L ast autumn the SEC carried out Congress’s instruction to remove a decades-old ban on general solicitation of private funds. However, certain voices within the SEC were said to have concerns about the efect of hedge funds engaging in mainstream advertising activity and the agency proposed onerous accom- panying rules which made the new regime less atractive. Lawyers told atendees at an event in New York on 11 September that 1,000 private fund managers – of all kinds – had applied to market under the Jobs Act by checking box 506(c) of securities ofering Form D. But the hedge fund manager numbers are much lower, according to experts, with some even reported to have mis- takenly ticked the box. Under the new rules, managers can talk to the media more freely, engage in discussions on social media and at events, upgrade their websites to provide more information and advertise more generally. Several New York hedge fund lawyers have noted that while clients had approached them to consider venturing into general solicitation territory, few have proceeded. “It hasn’t taken of,” says Kevin Scanlan, partner at Dechert. “I don’t have any clients that have checked the 506(c) box, although multiple clients have talked about it.” One Boston-based lawyer says he’s seen limited take-up from a couple of smaller managers. “Tey are two smaller hedge fund managers really trying to raise capital and be more aggressive through press releases, newspaper ads and the media,” he says. Massachusets-registered Lemelson Capital Manage- ment is among these frms. Chief investment ofcer Em- manuel Lemelson says he saw the Jobs Act as an opportunity to speak freely “without having to choose every word carefully”. “We were geting good results and I thought why don’t we publicise that?” he adds. Te frm now sends out press releases on its performance and had secured four inter- views with the press that week. TALKING TO THE PRESS Speaking to the media is a key reason to tick the box to generally solicit, say experts. Prior to the Jobs Act, hedge fund managers could talk about the manager and their strategy but not the specifcs of the fund to the media. However, this was seen as a very grey area. “It depended on what law frm you spoke to – some law frms previously did not feel comfortable with hedge funds puting anything out there,” says Don Steinbrugge, managing partner at third-party marketer Agecrof Partners. And lawyers say that while many hedge fund managers are not interested in TV commercials or billboards at the Super Bowl, many are interested in speaking about performance to the press. “In the past if a reporter called you with incorrect data on your fund, you were not even allowed to correct them because of the anti-solicitation rules,” says one US lawyer. Max Hilton, director at PR frm Peregrine’s New York SEC TARGET? WHO WANTS TO BE AN HF MWE E K . COM 21 2 5 S E P – 1 OC T 2 01 4 FEW HAVE [TICKED THE 506(C) BOX] BECAUSE OF CONCERN ABOUT WHAT THE NEW SEC RULES WILL REQUIRE AND, ONCE CHECKED, IT’S HARD TO UNCHECK ” STUART KASWELL, MFA ofce, brands the Jobs Act “the great equaliser”. “From the manager perspective and the investor perspective, it has dramatically improved the situation. By using media relations and events, people can now build brands and com- pete in efective ways.” However, lawyers cautioned that managers must check 506(c) in Form D to take advantage of these newfound freedoms, and that’s something few managers are doing. “Tere is a misconception that talking to the press has been relaxed, but if you do not check the box then nothing has changed,” says Stuart Kaswell, general counsel at trade body the MFA. LACK OF CLARITY Mixed messages and a lack of certainty has created confu- sion over the benefts of the Jobs Act. “Our concern is how to verify accredited investors,” says Kay Gordon, partner at Drinker Biddle & Reath. With no guidance on how to determine accredited investor status, Lemelson’s frm decided to distribute a two- page form for investors to complete and asks for a copy of the potential allocator’s licence. “It’s defnitely a real drawback and has been a slight inconvenience to some investors,” he says, noting he has felded calls from investors who say they are not accredited and therefore cannot proceed. Onerous rules were also proposed by the SEC, back in July 2013, which caused many hedge fund managers to wait on the sidelines for a fnal iteration that has yet to ma- terialise more than a year later. Te US regulator had proposed requiring pre-approval of marketing documents, an advance notice of a securities ofering 15 days prior and 15 days afer the frst sale and information on ofered securities, the issuer website, types of investors and use of proceeds from the ofering. Several lawyers say the SEC put the rules out to give managers pause on using 506(c). “I think it’s more an interim concept, as opposed to having any teeth,” says one. “Te SEC just doesn’t like [the Jobs Act]. Tey thought it would be fraught with abuse.” “We know the SEC doesn’t like it,” says another. “Do they want to frighten people away? Yes.” On 9 September the CFTC removed a huge hurdle to most managers availing of the new regime by allowing frms registered with the regulator to avail of the Jobs Act solicitation fexibilities. However, market participants are sceptical the food- gates will open. “We were pleasantly surprised, but there’s still a lack of clarity generally,” says Heller, noting that the CFTC release is only temporary relief until a fnal rule is passed, which could add further complications. NO GOING BACK Another key issue is that once managers tick the 506(c) box, they will be unlikely to be able to retract the position. “Few have done so because of concern about what the new SEC rules will require and, once checked, it’s hard to uncheck,” says Kaswell. “If you open the window and take advantage, you can’t really go back,” says MacLean. “What if you already ad- vertised on the website? What if you put your fund documents on the internet? Tere’s no going back.” Heller notes that at an event in New York on 11 Sep- tember, an atendee asked SEC director Norm Champ whether a frm could retract their decision if they had checked the 506(c) box. Champ refused to comment. TARGET PRACTICE Managers are perhaps even more concerned that by checking the requisite box, they are opening themselves up to further audits and questioning from the SEC. “Firms may be singling themselves out for exams,” says Gordon. “It’s a concern because a lot of information is being asked and there’s the possibility of being referred to enforcement. Ofcers have become more aggressive on more minor errors.” “We have heard of a manager fling a Form D and then the SEC showing up at the ofce ofering to help oversee the process,” one New York-based lawyer told sister publication HFMCompliance last week. “Tere hasn’t been that much interest because you make yourself a bullseye.” Scanlan says some people think the SEC will scrutinise all adverts more because of 506(c) but “that remains to be seen”. A source at the SEC had responded: “Te staf will review general solicitation practices and verifcation of accredited investor status under newly adopted Rule 506(c) under the Securities Act of 1933 to the extent conducted by a regulated entity; generally will review, monitor and analyse the use of Rule 506(c); and will evaluate due diligence conducted by broker-dealers and investment advisers for such oferings.” With so much uncertainty on everything from how to determine if an investor meets the necessary standards to future consequences and regulatory oversight, it’s no wonder that take-up of the Jobs Act by hedge fund managers is still predicted to be small, even afer the CFTC has removed its major obstacle. HFM FOCUS DEPTH OF EXPERTISE AND KNOWLEDGE 2 5 S E P – 1 OC T 2 01 4 22 HF MWE E K . COM FOCUS ON Rodney O. Davies, of ISIS, speaks to HFMWeek about the importance of logic capable technology and the increasing reliance on automation in today’s hedge fund industry IMPROVING CLIENT SERVICE THROUGH TECHNOLOGY HFMWEEK (HFM): WHAT ARE THE MAIN ISSUES FACING AD- MINISTRATORS TODAY AND HOW IS ISIS TACKLING THEM WITH TECHNOLOGY? RODNEY O. DAVIES (RD): Outside of regulation, one of the major issues afecting hedge fund administration is how to automate processes to create efciencies and reduce head- count with the ultimate goal of improving the botom line while delivering exemplary client service. When selecting a fund administration partner, investment managers may want to delve deeper into the service provider’s operational process and technology capabilities. Tis will be integral as their funds grow and go from a single-prime broker environment to a multi-prime environment. ISIS Fund Services Ltd (IFSL) has built solutions around certain core fund administration processes and ultimately achieved true straight through processing and reconciliation capabilities. For example, in the legacy fund administration model, accountants would either manually input trades into the portfolio accounting system from a trade bloter, or, if available, upload trades into the system using a fle that had been re-formated to what the accounting system could accept. Tis process became inadequate as the average number of trades increased and as the demand for real-time reporting grew. Over the past fve years, there has been a noticeable shif in the industry, where investment managers look to have their reports delivered on a T+1 basis before the markets open, rather than when the NAV has been fnalised (normally a month-end deliver- able). HFM: WHAT DOES THIS MEAN FOR ADMINISTRATORS? RD: Tis shif has created an urgent need for fund administrators and other service provider vendors, including prime brokers and technology providers, to build technology solutions that can span multiple systems and inter- faces. Te information needs to be pulled from multiple sources, verifed and generated into a reportable format to provide investment managers with the information they require to manage their funds in an information centric world, while at the same time not adding operational costs. HFM: WHAT SOLUTIONS HAVE BEEN PUT IN PLACE TO OVER- COME THESE ISSUES? RD: Most fund administrators have either adopted or adapted their core accounting systems to integrate the portfolio, general ledger and allocation functions in order to create efciencies. System vendors have added data feeds to allow prime brokers, banks, and data provider fles to be imported directly into portfolio accounting systems. Fund administrators and other industry vendors have purchased or developed reconciliation modules to complement the core portfolio accounting system. Tese reconciliation tools are necessary in order for fund administrators to deliver cash and position reconciliations to investment managers on a T+1 basis. Tere is ample proof that strong technological developments have been designed, tested and implemented in the fnancial services industry to deliver information to clients efciently. HFM: DID THIS TECHNOLOGY SOLVE THE PROBLEM? RD: In many cases, these simple technology solutions did not resolve the operational challenges that fund administrators face. To augment their technology ofering, fund administrators added teams of staf in low-cost jurisdictions to perform data processing functions with hopes of creating cost-efective efciencies. However, administrators still needed to staf their main servicing ofces adequately to review the information coming from the low-cost back ofce processing jurisdictions as well as in- teract with clients. Additionally, systems were not updated programmatically to adapt to new fle formats or changes in existing fle formats, thus creating mistakes and causing delays in reporting. Te disparity between data fles from prime brokers, custodians, clients and other service providers causes ex- cessive technological development requirements and operational resource utilisation on fund administrators. Tis can be compounded by the fund administrator having an infexible technology platform(s). HFM: SO WHAT IS THE ANSWER? RD: From a reconciliations perspective, match rules in many of the systems are simple and do not take into account complex matching logic. For example, prime broker A sends a security identifer that reads ‘XYZ US’ where- as the fund administrator’s system has ‘XYZ’. A simple matching tool would not recognise these securities as the same but a more sophisticated matching tool applies logic to match these securities automatically. Tis systematic Rodney O. Davies, chief technology officer, is a chartered accountant and certified information systems auditor who joined IFSL in 2007. Prior to this, Rodney was a senior business analyst with Citigroup Fund Services (Bermuda) Ltd. BY HAVING AN ACCESSIBLE DATABASE STRUCTURE, IFSL HAS BEEN ABLE TO DESIGN ADDITIONAL REPORTS TO MEET BESPOKE CLIENT REQUIREMENTS ” 2 5 S E P – 1 OC T 2 01 4 HF MWE E K . COM 23 SPONSORE D F E AT URE capability creates efciencies in the reconciliation process by removing the requirement of the user to manually match the security position. HFM: HOW DID IFSL OVERCOME THESE PROBLEMS? RD: To overcome these operational challenges, IFSL designed a proprietary rules engine application. Te key feature of the application is that the rules engine accepts any incoming fle regardless of format and does not store it in a structured form. Tis is a critical feature because of the huge disparity in the fle formats from various vendors. Within the application, there are three main decision processes that an input record passes through: ‘SKIP’, ‘PROCESS’ and ‘VALIDATE’. Tese processes normalise the data thus enabling the seamless transfer of data into the accounting system. Te application supports an unlim- ited number of rules on each row and feld of incoming data. Te system fexibility is essential in easing the burden on operational staf when processing trades and performing position reconciliations. Position and trade fles are then automatically processed through the application, requiring no manual intervention. If an error occurs, a notifcation is sent to the system administrator; and other delegates. However, the application is smart enough to know how to overcome most normal fle transfer/reconciliation errors through specifed criteria. Te application is used on incoming trade and position fles, processing them, and automatically transferring the fles into IFSL’s core systems. HFM: HOW HAS RECONCILIATION BECOME AUTOMATED AND HOW DOES IT WORK? RD: Te application has the ability to automate reconciliations when the accountant triggers a pre-defned reconciliation in the application. Te trigger automatically causes the application to take the broker position fle, the client fle (if available), and accounting system data to perform the reconciliation task. By having the rules engine process incoming position fles, the data can be manipulated into a format that can be used in the matching process. Tis dramatically reduces the reconciliation time and creates signifcant operational efciencies. Once the reconciliation has been completed, standardised and/or custom reports are generated and delivered to the client by their selected delivery method. By having an accessible database structure, IFSL has been able to design additional reports to meet bespoke client requirements. HFM: WHAT WOULD OPTIMAL PROCESSING LOOK LIKE? RD: Standardisation. Tere have been a plethora of eforts over the years to get to a point where data interchange is standardised. Without a clear set of standards which all industry participants subscribe to, there will always be a need for fle transformation. Te key for IFSL to overcome the lack of standardisation has been to develop proprietary technology solutions. Other players in the fnancial services industry seem to be ahead of the boutique fund administration service providers. Traders and prime brokers, for example, have been able, to a large extent, to resolve their trade processing with the ‘FIX’ protocol. Equally as good eforts have been made on the output side, i.e. reporting, in recent years with respect to standardisation. Examples like XBRL, which has been implemented by the SEC for fnancial reporting, and OPER (Open Protocol Enabling Risk Aggregation) for risk reporting by investment managers. A similar project needs to be undertaken within the specialised fund administration space to standardise portfolio trade processing across vendors within the fnancial services industry so that service providers are able to deliver accurate data ef- fciently to investment managers. HFM: WHAT IS THE ONE PIECE OF ADVICE YOU THINK THAT READERS SHOULD TAKE FROM THIS? RD: In general, we encourage investment managers to dig deeper into a fund administrator’s back-ofce processes, regardless of an administrator’s size, to gain comfort that they are partnering with a fund administrator that is technology focused and will be able to continually ofer them timely reporting in an efcient manner as they grow and expand their hedge fund oferings. n WE ENCOURAGE INVESTMENT MANAGERS TO DIG DEEPER INTO A FUND ADMINISTRATOR’S BACK-OFFICE PROCESSES TO GAIN COMFORT THAT THEY ARE PARTNERING WITH A FUND ADMINISTRATOR THAT IS TECHNOLOGY FOCUSED ” SERVICES DIRECTORY 2 5 S E P – 1 OC T 2 01 4 24 HF MWE E K . COM F U N D A D M I N I S T R A T O R S Rod White, Director, Bermuda and North America // [email protected], Alan McKenna, Director, Europe // amckenna@equinoxeais. com, Irfaan Hossany, Director, Mauritius and Africa// [email protected], Liam McHugh, Director, Asia // [email protected] Equinoxe is a premium boutique service provider founded in 2007 by experienced hedge fund administration professionals. Headquartered in Bermuda, with operational offices in Bermuda, Ireland, US, Mauritius, Malta and Singapore, we are a full service alternative investment fund administration organization offering both traditional hedge fund administration and middle office outsource products. With institutional technology, institutional procedures, including a SOC 1 report across all offices, the 150+ funds under administration experience ultimate client service via a bespoke operating model tailored to each clients needs. Thalius Hecksher, Global Managing Director of Business Development // T:+1 (786) 8771923 // [email protected] Peter Hughes, CEO and Founder / T:+44 (0) 778 0997609 // [email protected] Apex Fund Services was established in 2003, and is now one of the world’s largest independent fund administration companies with 34 offices and $26bn AUA. The Apex Global Network is at the heart of the Company’s strategy of being located alongside its clients providing the highest levels of personalized fund services based on four core pillars: Fund Administration, Fund Launch Solutions, Financial Outsourcing and Technologies, providing a full suite of services for our clients. Apex is unique in its ability to Reach Globally, Service Locally and provide best practice cross-jurisdictional solutions enabling a straight through process with complete integration. Canover Watson, Managing Director – Admiral based in Cayman // T: +1 345 949 0704 // [email protected], Ted Jasinski, General Manager – Admiral based in Virginia // T: +1 804 578 4540 // [email protected] // www.admiraladmin.com Admiral Administration is a specialist hedge fund administrator founded in 1996. Admiral is part of the Maitland Group, a global institutional provider of fund administration and multi-jurisdictional legal, tax, fiduciary and investment advisory services. The group has US$200 billion under administration and 700+ employees servicing clients from 13 offices across 12 countries. Whether your fund trades equities, options, futures, bonds, bank debt, or complex derivatives, Admiral has an efficient solution to account for the security and customized reporting to match your needs. Mark Catalano, Head of Business Development // 17310 Red Hill Ave, Suite 135, Irvine, CA 92614 // T: +1 760 889 1225 // mcatalano@atlasfundservices. com // April Spencer, Vice President // 3440 Torringdon Way, Suite 205, Chartlotte, NC 28277 // T: +1 980 265 2367 // [email protected] // Danique Sprock, Managing Director // Ara Hill Buildiing, Pletterijweg Oost 1, Willemstad, Curacao // T: (599-9) 845-3286 // [email protected] Atlas Fund Services (“ATLAS”) provides complete fund service solutions. Atlas is a privately held, fully licensed, recognised global fund services provider, delivering tailored hedge fund administration solutions to alternative investment funds including private equity, real estate funds, venture capital funds, hedge funds, and managed accounts. ATLAS is the synergistic partner and preferred incubator of one the world’s largest fund administrators, delivering premium fund service solutions to investment managers located in the United States, Latin America, Brazil, Europe, and Asia, and servicing US onshore funds, and funds in offshore jurisdictions such as the Cayman Islands, the BVI, and Bermuda. The firm has regional offices in Charlotte, North Carolina, Curacao, and soon Malta. Gerben Oldekamp // T: +31 (0)334673898 // [email protected] // www.circlepartners.com // Circle Partners, Utrechtseweg 31D, 3811 NA Amersfoort, The Netherlands. Circle Partners is a financial services organisation specialised in rendering accounting and administration, shareholder and organisational services to investment funds established in a different number of jurisdictions and with diverse investment strategies. Our goal is to assist asset managers in building their investment fund and enabling them to concentrate on the asset management business through a process of outsourcing virtually all back-office functions to Circle Partners. Special care and attention is given to accurate and swift communication with the fund manager and shareholders to enhance client satisfaction and confidence and to assist in creating a sound reputation for the fund. Andrew Dougherty, Managing Director and Head of Alternative and Institutional Solutions - Securities Services North America // T: +1 212 841 2843 BNP Paribas is a leading global provider of securities services that delivers integrated solutions for all participants in the investment cycle: sell side, buy side and issuers. With a local presence in 32 countries across 5 continents and a global coverage of over 100 markets, we work by our clients' side around the world, offering a one-stop shop for all asset classes, both onshore and offshore. In the alternative investment industry, BNP Paribas is well-regarded for the level of thought leadership and service excellence expected from one of the world’s largest and strongest banking groups*. Thanks to our continual investment in technology, people, and product development, we deliver innovative, operationally efficient solutions that operate across the entire value chain for single hedge funds, funds of hedge funds, and separately managed accounts. *Rated AA- by Standard and Poor's. CACEIS // Paddy Walsh, Business Development Director – UK & Ireland // UK Tel: + 44 20 7214 5053 // email: [email protected] // www.caceis.com CACEIS is an asset servicing banking group dedicated to institutional and corporate clients. Through offices across Europe, North America and Asia, CACEIS offers a broad range of services covering depositary and custody, fund administration, alternative investment servicing, middle-office outsourcing, derivatives clearing, forex, securities lending, and fund distribution support. CACEIS is a leading player in the alternative investment servicing market, and with assets under custody of €2.3 trillion and assets under administration of €1.3 trillion, CACEIS is one of the leading global asset servicing providers and the largest depositary and premier fund administrator in Europe (figures to 31 December 2013). Marina Lewin, Head of Global Business Development, Asset Servicing // T: +1 212 815 6973 // [email protected] Mark Mannion, Head of EMEA Business Development, Alternative Investment Services // T: +353 1 900 4547 // [email protected] BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on www.bnymellon.com, or follow us on Twitter @BNYMellon. Michael Keyrouz // T: +356 2258 9502 // [email protected] Ian Hamiltion // T: +27 21 402 1600 // [email protected] // 276 Fleur-de-Lys Road, Birkirkara, BKR 9067 Malta IDS Fund Services Malta is part of the IDS Group, the leading African Alternative Investment Administration Group. IDS Malta is regulated by the Malta Financial Services Authority, having opened on the island in April 2010. The company serves funds domiciled in Malta as well as other international domiciles. The company is also affiliated with a number of platforms, providing tailored and inexpensive hosting facilities for start-up and smaller Malta and Cayman-based funds. IDS Group has become a leading fund administrator through listening to its clients and providing tailored solutions and services. 2 5 S E P – 1 OC T 2 01 4 HF MWE E K . COM 25 To promote your company, email: director [email protected] or call UK +44 (0)20 7832 6615 // US +1 (212) 268 4919 Tony Fischer, President // Tel: +1 267-349-8065 // www.umbfs.com The Alternative Investment Services division of UMB Fund Services offers a complete back-office solution for hedge funds, funds of funds, registered hedge funds and private equity funds. Our full-service lineup includes product formation assistance, fund administration and accounting, investor accounting and reporting, tax preparation and reporting, and custody (through our affiliate, UMB Bank, n.a.). We are known for high-touch service, leading-edge technology, and the stability of a highly capitalized parent that’s been around for 100+ years. Ask us about Registered Fund Solutions, the industry’s first turnkey solution for launching and servicing a registered hedge fund. Concetta Mastrangelo, Fund Services Business Development, USA // T: +1 212 719 2178 // [email protected] James Gilbert, Fund Services Business Development & CRM, Cayman Islands // T: +1 345 914 6150 // [email protected] UBS's Fund Services business is a global fund administrator providing professional services for traditional investment funds, managed accounts, hedge funds, private equity funds and other alternative structures. With service centers located in Canada, Cayman Islands, Ireland, Jersey, Luxembourg, Singapore, Switzerland and the United States together with business development and client service offices located in Hong Kong and the United Kingdom, Fund Services is dedicated to providing a comprehensive range of asset services to clients around the globe. For more information, visit www.ubs.com/fundservices Karine Seguin, Head of Business Development – Europe // T: + 44 (0)207 935 1503 // [email protected] Dan Smith, Head of Business Development – North America // Tel: +1 (404) 364 2068 Trident Fund Services, a division of the Trident Trust Group, provides cost-effective fund representation and administration services across ten jurisdictions in the Caribbean, North America, Europe and Asia. Serving more than 325 funds with AuM exceeding $30bn, managers select us for our independence, pricing based on services performed and not AuM, global footprint, experienced personnel, reliability and responsiveness. We offer clients a more than 30-year track record as a leading provider of administration services to the financial services sector worldwide. Visit us at www.tridentfundservices.com Punit Satsangi, EMEA Managing Director // [email protected] // T: +44 (0)20 3310 3304 1 St. Martins Le Grand, London, EC1A 4AS // www.sscglobeop.com SS&C GlobeOp, a division of SS&C Technologies, is an independent top-10 fund administrator for both onshore and offshore hedge funds. Key differentia- tors for our business include our cutting-edge cloud-based services which allow unparalleled transparency and access for investors, regulators and clients alike; our high quality custom service model; our significant staff expertise and propriety ownership of state of the art technology. Our growth and success is driven by high quality service, satisfied customers and referrals. SS&C GlobeOp serve over 6, 700 funds representing $430bn in AUA ranging from start-up funds to some of the biggest names in the industry. Ken Somerville // Head of Business Development // [email protected] // T: +353 1 523 8003 // www.quintillion.com Joan Kehoe // Chief Executive Officer // [email protected] // T: +353 1 523 8001 // www.quintillion.com Quintillion is a specialist Dublin based provider of fund administration to alternative investment funds. We provide back and middle office services to a diverse range of fund structures, strategies and domiciles supported by class leading technologies and our expert operations group. Following our start-up or conversion process, funds are serviced by client-centric investor services and accounting teams delivering an accurate, timely and transparent administration solution all within strict deadlines. F U N D A D M I N I S T R A T O R S Robin Bedford, CEO // [email protected] // (441) 234-0004 // Stephen Giannone, President & Head of Sales // sgiannone@ opusfundservices.com // (312) 374-1614 // Greg Knapp, Business Development // [email protected] // (415) 762-8749 // Jorge Hendrickson, Business Development // [email protected] // (646) 439-7004 Opus Fund Services is an award winning independent fund administration firm. Within a SSAE16 approved process, Opus uses unique technology and flat fee pricing to provide automated, integrated middle & back office administration services to domestic and offshore hedge fund and alternative investment vehicles. The ONE platform has received widespread industry recognition including “Best Overall Fund Administrator with AuA < $30bn” by HFMWeek, and Top-Ranked Fund Administra- tor by Global Custodian for an unprecedented five consecutive years. For more information on Opus Fund Services, please visit www.opusfundservices.com. Steve Slessor, Managing Director, Global Head of Sales // T: +1 519 748 6028 x140 // [email protected] Blair Henderson, Managing Director, Business Development // T: +44 0 203 195 0336 // [email protected] Mitsubishi UFJ Fund Services is part of the fifth largest bank in the world with $2.4tn in assets and over 140,000 employees worldwide. Mitsubishi UFJ Fund Services provides a multi product offering that suits clients’ specific needs – leveraging the financial and intellectual capital of Mitsubishi UFJ Financial Group. From fund administration, custody, FX hedging, trust, depositary to securities lending and other banking services, Mitsubishi UFJ Fund Services partners with clients throughout the trade lifecycle. Mitsubishi UFJ Fund Services has $165bn in AuA, servicing 1000 funds globally. Asia: Gillian Chan // T: +852 2295 2968 // gillian.chan@orangefield.com Europe: Sean Murray // T: +352 (49) 6767 4417 // sean.murray@orangefield.com www.orangefield.com For 40 years across our 25 global locations, Orangefield has been providing exceptional alternative investment fund services. Our full suite of services includes administration, set-ups and back / middle office outsourcing as well as corporate, director and trust services along with regulatory compliance. Orangefield employs an expert consultative approach to create solutions unique to the client and believes that investing in exceptional technology to meet higher standards allows our clients to succeed. We follow this principle of mutual growth throughout the entire fund life cycle. Bob Kern T:+1 800 300 3863 // [email protected] // 615 East Michigan St. Milwaukee, WI 53202 // www.usbfs.com Since 1969, clients have come to rely on US Bancorp Fund Services for innovative service solutions and industry expertise. US Bancorp Fund Services has built its reputation on offering the broadest range of top-quality mutual fund and alternative investment product services. The expertise of US Bancorp Fund Services extends from mutual funds to a wide variety of alternative investment product services, including hedge funds, funds of funds, limited partnerships, offshore funds, private equity funds and separately managed accounts. With specialist expertise in both single manager and fund of hedge fund administration, services can be provided for both onshore and offshore funds. Through our comprehensive range of services and products, leading edge technology platforms and superior client service, we work in partnership to offer the solutions you need. SERVICES DIRECTORY 2 5 S E P – 1 OC T 2 01 4 26 HF MWE E K . COM E X E C U T I O N V E N U E A C C O U N T I N G , T A X & A D M I N I S T R A T I O N LMAX Exchange LMAX Exchange, Yellow Building, 1A Nicholas Road, London, W11 4AN, Institutional Sales // T: +44 20 3192 2682 // F: +44 20 3192 2572 // [email protected] The award-winning LMAX Exchange is the first MTF for FX authorised and regulated by the FCA – delivering the benefits of limit-order driven, exchange quality execution, pre and post-trade transparency, 4ms trade execution speeds in 66 FX pairs and no ‘last look’ to the institutional FX market – all via multiple connectivity options: FIX 4.4, Java and .Net APIs, MT4/5 bridges. LMAX Exchange – a unique vision for global FX. LMAX Limited operates a multilateral trading facility. Authorised and regulated by the FCA – registered no. 509778 International Management Services Ltd. Geoff Ruddick, Head of Funds // T: +1 (345) 814 2872 // Gary Butler, Managing Director // T: +1 (345) 814 2874 // [email protected] // www.ims.ky International Management Services Ltd was one of the first in Cayman to specialise in providing professional independent directors to the fund industry. Today, we are a leading provider of corporate governance and associated services to the fund industry. All of our fiduciaries are registered with the Cayman Islands Monetary Authority as ‘Professional Directors’. Our team has over 200 years of collective experience in the fund industry and provides services to some of the largest global hedge fund organizations. We are one of the largest and longest standing truly independent providers of such services. A C C O U N T A N T SDavid Jarman, Partner //T: +44 (0)20 7556 1262 // [email protected] // Peter Chapman, Partner // T: +44 (0)20 7556 1415 // [email protected] Buzzacott LLP // 130 Wood Street, London, EC2V 6DL // [email protected] // www.buzzacott.co.uk Buzzacott is a London based accountancy firm with a specialist team offering audit, accounting and taxation services to the hedge fund sector. Buzzacott is a market leader for the provision of start-up, HR, FCA reporting and business support services to UK and US managers and their stakeholders. Buzzacott's Expatriate Tax Team has over 60 tax advisers with UK and US tax qualifications and can provide the added compliance and advisory tax services to clients with US shareholders or employees. Michelle Carroll, partner, Asset Management & Funds // T: +44 (0)20 7893 2711 // [email protected] // Neil Griggs, partner, Hedge Funds // T: +44 (0)20 7893 3775 // [email protected] // BDO LLP // 55 Baker Street, London // T: +44 (0)20 7486 5888 // www.bdo.uk.com BDO is the world’s fifth largest accountancy and professional services firm, with nearly 49,000 partners and staff across 119 countries, including all major financial centres. We have a strong reputation as a leading advisor to financial services firms with a particular emphasis on the asset management sector. We have a dedicated global team and a multidisciplinary approach combining strategy, regulation, risk, tax, corporate finance and IT specialists. Christian Bekmessian // T: +1 212 891 4062 // [email protected]; Peter Cogan // T: +1 212 891 4047 // [email protected] EisnerAmper LLP is a premier full-service accounting, tax and administration firm with global capabilities. EisnerAmper has led the way in establishing and building a highly trained and dedicated Hedge Fund Group. Our professionals have experience and expertise in the intricacies of the regulatory and tax environment, the valuation of complex financial instruments and the challenges of maintaining strong accounting and investment controls. The professionals of EisnerAmper have a decades-long service record to the financial services industry, giving us an understanding of the problems you face on a daily basis, as well as the ability to provide practical solutions. www.eisneramper.com Alan D. Alzfan, Partner, Financial Services Practice - North America // T: +1 212-372-1380 // [email protected] Simon Lesser, Financial Services Practice - North America // T: +1 312 634 4604 // [email protected] With more than 50 years of experience serving the financial services community in key financial hubs, McGladrey professionals help organizations navigate complex reporting, governance and regulatory issues to achieve their business objectives. Based on the knowledge that comes from serving alternative investment companies, investment advisors, investment partnerships/hedge funds, private equity funds, business development companies, mutual funds, broker-dealers and futures commission merchants, we understand the complex operational, financial reporting and compliance issues facing the industry. We provide industry insight, advice and solutions to financial services organizations across the country and around the world. That’s what you can C U S T O D I A N B A N K I N G Paul Mifsud, Managing Director // [email protected] // 101 TOWNSQUARE, Ix-Xatt ta’Qui-si-Sana, Sliema SLM 3112 T: (+356) 21 33 57 05 // www.sparkasse-bank-malta.com Sparkasse Bank Malta plc forms part of the Austrian Savings Banks and the Erste Group Bank AG forming part of Austria’s largest banks. From Malta the bank provides private banking and fund custody solutions. As trained private bankers, the bank strives to deliver private, personal and tailored solutions to its fund customers by offering a seamless banking, execution, settlement and custody solution from one account. Fund custody is considered a core service at Sparkasse Bank Malta plc and the bank avoids all potential conflicts by focusing entirely on what it is they are truly hired to do i.e. – safekeeping, record keeping, monitoring and reporting. Rosie Guest, Brand Development Manager // [email protected] // Robert Kelly, Senior Partner // [email protected] //T: +44 (0)207 529 2305 // 3rd floor, 4 Maddox Street, London, W1S 1QP Headquartered in London, Baronsmead is an independent, specialist risk consultant and broker providing financial risks insurance, guidance and advice to the alternative investment management industry. Baronsmead provides managers and their funds with risk transfer protection from the legal, regulatory, operational and employment risks they face. We have a tried and tested product, and in recent years, have managed and settled around $20m of manager and fund claims in the UK, New York, Cayman Islands and BVI. Hands-on claims management is key, and for this reason we have our own insurance litiga- tion solicitor in-house. At Baronsmead we believe in doing what is right for our clients and maintaining those relationships through a quality service. I N S U R A N C E B R O K E R S Lockton Financial Risks, The St Botolph Building, 138 Houndsditch, London EC3A 7AG Henry Keville, T: +44 (0)20 7933 2157 // [email protected] Lockton is the world’s largest privately owned, independent insurance broker, which means our focus is on our clients and our people rather than external analysts and institutional shareholders. Lockton truly has a global footprint with over 60 offices around the world and more than 4500 employees with more than 15,000 clients. Our award winning specialist division focus exclusively on the asset management industry and our clients range from the largest asset management firms in the world right down to numerous start up operations with each and every client receiving the very best service; our clients have a combined AUM of US$10trn. Call us to find out why the team have the highest client retention rate of any other broker. I N D E P E N D E N T D I R E C T O R S IMS 2 5 S E P – 1 OC T 2 01 4 HF MWE E K . COM 27 To promote your company, email: director [email protected] or call UK +44 (0)20 7832 6615 // US +1 (212) 268 4919 E Phillip Chapple, Executive Director // [email protected] // T: +44 (0) 203 170 8815 KB Associates is a boutique operational consulting firm with offices in Dublin, London, Luxembourg, Cayman and New York. KB Associates advises managers on operational issues relevant to the establishment and ongoing management of offshore investment funds. Services include tailored hedge fund and investment manager start-up services, preparation for investor due diligence (full review to identify potential issues combined with advice on meeting growing investor due diligence standards) and re-domiciliation advisory services. A D V I S O R Y P R I M E B R O K E R A G E Kevin M. LoPrimo, Managing Director – Head of Hedge Fund Services and Equity Finance // T: +44 (0)20 7399 9461 Julian Parker, CEO // T: +44 (0)20 7399 9450 Global Prime Partners Ltd is a prime broker providing a highly personalised specialist service to start up and emerging hedge funds, family offices, asset managers and professional traders, often overlooked and underserviced by large firms. Our integrated, proprietary technology platform, allows us to provide the right level of integration and reporting to meet each of our client’s needs. We provide start up consulting, trade execution, clearing, custody, margin financing, stock lending and potentially introduction to capital. Jack D. Seibald, Managing Member, 1010 Franklin Avenue, Suite 303, Garden City, NY 11530 // Tel: +1 (516) 746 5718 // Mob: +1 516 359 7503 // email: [email protected] Concept Capital Markets, LLC offers comprehensive brokerage and related services that provide traditional and alternative investment managers with cus- tomisable and scalable solutions. We were built by former investment managers to serve hedge fund managers, managed account platforms, institutional investors, family offices, and registered investment advisers with turnkey solutions designed to free clients to focus on their core competencies. Our offering features world-class custody and clearing options, multi-asset class capabilities, leading execution and order management systems, a seasoned execution desk, a range of financing options, a highly professional operations and customer support team, comprehensive portfolio reporting capabilities, and capital introduction. Jerry Lees, Chairman, Linear Investments // T:+44 (0) 203 603 9801 // jleeslinearinvestment.com // Sales +44 (0) 203 603 9844 sales@ linearinvestment.com // US office: T: +1 (212) 293 1836 // 800 Third Avenue, 39th Floor, New York, NY 10022 // www.linearinvestment.com Linear Investments provides Mini-Prime brokerage, regulatory incubation and capital introduction services geared towards smaller/mid-size funds. With Linears’ aggregated PB relationships, we can provide attractive pricing for our clients. For Capital introduction, Linear provides investment via its B&L Seeder fund for seed/acceleration capital. In addition, Linear provides outsourced trading through its experienced trading team, encompassing a comprehensive Electronic Execution platform. Kate Wormald // 103 Wigmore Street, London W1U 1QS // T: +44 (0)20 3693 6085 We are a highly respected specialist consultancy providing legal and regulatory services to hedge funds and investment managers. We provide dynamic and proactive assistance in negotiations of all trading documentation. As specialists we do not have the distractions of a wider portfolio and therefore offer, what we believe is, an unrivalled level of service and understanding in the hedge fund arena. As active participants in the hedge fund industry we are closely involved in key industry developments. We pride ourselves on working in the most commercial and effective ways that best fit with our client’s strategies and objectives. Josée Weydert, Managing Partner & Banking and Finance Partner // [email protected] // 2, rue Jean Bertholet, L-1233 Luxem- bourg, Grand Duchy of Luxembourg // T: +352 26 12 29 1 // F: +352 26 68 43 31 // www.nautadutilh.com NautaDutilh is an international law firm with offices in Amsterdam, Brussels, London, Luxembourg, New York and Rotterdam. With more than 400 lawyers, notaries and tax advisers, NautaDutilh is one of the largest law firms in the Benelux region. NautaDutilh Avocats Luxembourg is a full service business law firm. It provides high quality legal advice and services in banking & finance, corporate, capital markets & securitization, insolvency, tax, investment funds as well as intellectual property and ICT. NautaDutilh Avocats Luxembourg is a recognised player in the Luxembourg legal market. With its 35 lawyers, it serves a wide range of institutional clients, mainly financial institutions, asset managers, large and mid-sized corporates, private equity firms, funds sponsors and IT companies. Henry Bregstein, Global Co-Chair of Financial Services Practice // P: (212) 940-6615 // F: (212) 940-3808 // [email protected] Lance Zinman, Head of Chicago Financial Services Practice // P: (312) 902-5212 // F: (312) 577-4587 // [email protected] Katten advises many of the world’s premier domestic and offshore hedge funds, commodity pools, and other collective investment vehicles. Both first-time and well-established sponsors come to Katten for guidance on the structuring, formation and documentation of hedge funds. We also advise private fund clients in corporate and financing transactions, including leveraged buyouts, minority investments, public and private exit transactions, recapitalizations, restructurings, and fund formation. Katten attorneys help our investor clients optimize the terms of each investment and prioritize their goals within each fund’s unique framework. Our depth of experience representing both sponsors and investors positions us to respond quickly with practical solutions that move deals forward. L A W Craig Aronoff // T: +1 (646) 545 3859 // email: [email protected] Robert Morse // T: +1 (646) 545 3860 // email: [email protected] Victor Securities provides technology-driven brokerage solutions to professional investors including hedge funds, RIAs, CTAs and proprietary trading firms. Our clients benefit from real-time risk management tools, customizable reporting, choice of trading platforms, and a capital introduction team that focuses on facilitating mutually beneficial relationships between managers and investors. Rawden Leigh, Marsh FINPRO UK // [email protected] // T: +44 207 357 1209 James S. Obrien, Marsh FINPRO // [email protected] // T: +1 212 345 6432 Marsh is a global leader in insurance broking and risk management. We help clients succeed by defining, designing, and delivering innovative industry-specific solutions that help them effectively manage risk. We have approximately 27,000 colleagues working together to serve clients in more than 100 countries. Marsh is a wholly owned subsidiary of Marsh & McLennan Companies, a global professional services firm offering clients advice and solutions in the areas of risk, strategy, and human capital. Marsh & McLennan Companies has more than 54,000 employees worldwide and approximately $12bn in annual revenue. I N S U R A N C E B R O K E R S SERVICES DIRECTORY 2 5 S E P – 1 OC T 2 01 4 28 HF MWE E K . COM Ras Sipko, COO // T: +1 201 291 7747 Koger Inc, 12 Route 17 North Suite 111 Paramus, NJ 07652 // www.kogerusa.com // [email protected] Established in 1994, KOGER® is a leading provider of technology solutions to the fund administration and asset management industries. With offices in the United States, Ireland, Slovakia and Australia, KOGER® provides comprehensive technical support 24 hours a day during business days. KOGER® products include: NTAS®, a shareholder register and transfer agency system, ETAS TM , a three-tier web application connecting authorized third-parties with NTAS®, GRID®, a middleware application that facilitates the STP of data in and out of NTAS®, IKAS®, a fund accounting platform, PTAS®, a share-registration system that meets the needs of conventional and alternative pension funds, and PENTAS®, a Private Equity fund administration application. Capital Support Ltd, 3 Harbour Exchange Square, Docklands, London, E14 9GE // Nigel Brooks, Managing Partner // T:+44 (0)20 7458 1290// [email protected] // Carrie Saunderson, Head of Business Development // T:+44 (0)20 7458 1290 // [email protected] Capital Support is an award winning managed IT services and support provider. The Company specialises in implementing and supporting end-to-end solutions for a large portfolio of global finance sector customers. Based in London, Capital Support has grown steadily since forming in 2002. This successful growth has been fuelled by Capital Support’s commitment to innovation and exceptional customer service. The company ethos is to make IT simple for its customers, replac- ing the burden of high contact IT services with intelligently designed packaged solutions that span from consultancy, design and deployment all the way through to live support. Capital Support’s number one objective is to become the most trusted and respected managed IT services provider in the UK. Backstop Solutions // US: Patrick Rodgers, VP, Regional Sales Manager & Sales Development // T: +1 312-277-7701 // 233 S. Wacker Dr., Suite 3960, Chicago, IL 60606, USA // EU: Simon Johnson, Managing Director, EMEA // T: +44 (0) 203 764 7090 // 25 Berkeley Square, Berkeley Square, London, W1J 6HN, United Kingdom Backstop Solutions Group, LLC is an award-winning provider of innovative software solutions to hedge funds, funds of hedge funds, endowments, foundations, pensions, fund administrators, private equity firms and family offices throughout the United States, Europe and Asia. BSG was founded in 2003 with the goal of creating the industry’s first Software-as-a-Service platform designed to help firms in the alternative investment management industry operate efficiently, invest intelligently and communicate effectively. For more information about Backstop’s product offerings, contact us at: [email protected] T E C H N O L O G Y CYMBA Technologies Ltd, Holland House, 4 Bury Street, London EC3A 5AW // www.cymba-tech.com Karim Ali, partner & co-founder // [email protected] // T: +44 207 220 6561 CYMBA Technologies is a supplier of front office software solutions for the asset management, multi manager and hedge fund sectors across fund management trading, compliance and operations functions inclusive of 3rd party connectivity with prime brokers, custodians & administrators. The CYMBA Athena IMS provides multi-asset class asset allocation, portfolio management, decision support, order generation, algorithmic trading, real time profit and loss analysis, execution management and pre & post trade compliance functions to some of the largest investment organisations in the world. Gravitas, 475 Park Avenue South, 32nd Floor, New York, NY 10016 Derek Huyser, Business Development // T: +1 312 509 4079 // [email protected] Gravitas is a leading provider of co-sourcing solutions for technology, investment operations, risk and research support to the alternative investment and financial services industry. Founded in 1996, the company provides hedge funds, private equity funds and other alternative asset managers with unique and flexible co-sourced offerings for systems integration, technical support, software development, investment operations, risk analytics, investment research support and more. From co-sourcing and advisory through implementation, Gravitas designs creative solutions that give clients the operational freedom to HedgeGuard Financial Software // Shona Lynch // T: +(44) 2037007320 Established in London and Paris, HedgeGuard Financial Software is the specialist software provider for hedge funds, family offices, asset managers and startups. HedgeGuard®, their front-to-back portfolio management software, is designed to provide accurate performance monitoring of all funds, from one single platform. It smoothes out the whole management chain, from order management, position keeping, risk management, compliance and reporting. Their clients have the possibility to add other components to HedgeGuard®: the middle-office outsourcing service, working as a natural extension of the fund management team, and the mobile office option, offering full database hosting on private cloud and secured remote access. Not just another software provider. Discover more here www.hedgeguard.com Eze Castle Integration, Dean Hill, Executive Director // +44 (0)207 071 6802 Simon Eyre, Director of Service // +44 (0)207 071 6835 Interpark House, 7 Down Street, London, W1J 7AJ, email: www.eci.com Eze Castle Integration is the leading provider of IT solutions and private cloud services to more than 650 alternative investment firms worldwide, including more than 100 firms with $1 billion or more in assets under management. Since 1995, Eze Castle Integration has developed financial vertical-specific IT solutions including infrastructure design and management (both in our Eze Private Cloud and on premise), telecommunications, business continuity planning and disaster recovery, archiving, storage, and internet services. These solutions are complemented by a broad service organisation that delivers outsourced IT support, including a 24x7x365 help desk, project and technology management services, consulting services and more. Eze Castle has presence in major financial centres including 8 US offices, a Singapore office, and a Hong Kong office in addition to its London office. Intralinks, Inc, www.intralinks.com/hedgefund // T: 1-866-INTRALINKS, +44 (0) 20 7549 5200 Intralinks Fundspace™ for hedge fund managers provides best-in-class tools to distribute information to investors securely, efficiently and confidently. From capital-raising to investor reporting, Fundspace provides a single, end-to-end solution to effectively engage with and meet the increasing demands of institutional investors. With over 25,000 endowments, foundations, pensions, consultants, and advisors accessing information from over 500 fund managers, Fundspace is the world’s leading communication platform for alternative investment. For more information, visit www.intralinks.com/hedgefund. D E P O S I T A R Y S E R V I C E S Bill Prew, CEO // T: 44 (0) 203 691 6327 // [email protected] // www.indosgroup.com Paul Whelan, Head of Depositary Services // T: 353 (53) 924 3861 // [email protected] // www.indosgroup.com INDOS Financial specialises in providing AIFMD Depositary-Lite services to offshore hedge funds. Under the AIFMD EU hedge fund managers marketing offshore HFs to European investors, as well as non-EU managers marketing to certain EU countries, need to comply with new depositary requirements. Managers need to appoint a firm such as INDOS to perform oversight over fund valuation, subscriptions and redemptions, compliance with laws, regulations and investment guidelines as well as cash flow monitoring and record keeping of other assets. INDOS is 100% independent and will work with most leading hedge fund administrators to perform arms-length oversight. INDOS is authorised by the Financial Conduct Authority as an Article 36 Custodian. 2 5 S E P – 1 OC T 2 01 4 HF MWE E K . COM 29 To promote your company, email: director [email protected] or call UK +44 (0)20 7832 6615 // US +1 (212) 268 4919 netConsult Ltd, Level 3, 75 Wells Street, London W1T 3QH // www.netconsult.co.uk Richard McDonald, Director // T:+44 (0)20 71003310 // [email protected] // David Mansfield, Director // T:+44 (0)20 71003310 // dmansfi[email protected] Established in 2002, netConsult is an award winning provider of managed IT Services to the global alternative investment industry. We aim to provide a high level of technical expertise to our clients combined with a dedication to customer service. Our ethos is based upon designing secure IT platforms which are manageable over the long term. We are a trusted technology provider to a large portfolio of clients ranging from small start ups to large global funds. netConsult provides a bespoke service to its clients and provides a full suite of IT services including Cloud Services, Outsourced IT, BCP, Virtual CTO and IT Security. Nirvana Solutions, Mark Donovick, Vice President - Marketing // 80 Broad Street, Suite 1808, New York, NY 10004 // Tel: +1 212 768 3410 // email: [email protected] // London: Tony Premi // [email protected] // +44 (0) 203 174 2342 Nirvana Solutions is a cloud-based financial technology company that provides outsourced portfolio management solutions to hedge funds, prime brokers, and fund administrators. Nirvana is headquartered in New York City, with offices in San Francisco, London, and Dehli. Investment managers need a reasonably priced, entry-level yet scalable system which enables them to minimize upfront capital outlay and concentrate on alpha generation instead of systems and data management. Nirvana consolidates and manages data across multiple asset classes, funds, accounts, traders, prime brokers and custodians in a single integrated platform to provide our clients with cloud-based OMS, PMS, risk management and reporting solutions. Netage Solutions, Inc., 400 Talcott Avenue, 3rd Floor, Watertown, MA 02472 // www.netagesolutions.com Andrew Nelson, Head of Hedge Fund Sales // Tel: 617 393 2368 // email: [email protected] Netage Solutions has been a premier provider of industry-specific CRM software and online reporting systems for the alternative assets industry since 1998, building a client base that includes hedge funds, funds of funds, private equity and venture capital firms, real estate investment firms, prime brokers, family offices, and institutional investors. Intuitive and highly configurable, Netage's flagship Dynamo™ Suite has improved the productivity of investor relations, marketing, and research teams worldwide. Deep industry experience, dedicated client service and a culture of continuous innovation has made Netage Solutions the vendor of choice for more than 275 of the world’s premier alternative investment firms. Collectively, our clients manage over $650 billion in assets. To learn more about Dynamo™, or to request a product demo, please contact us at [email protected]. Solidfire, Grant Stephens // +44 (0) 7538 440722 // grant.stephens@solidfire.com, Martin Cooper // +44 (0) 7943 211 979 // martin.cooper@solidfire.com SolidFire is the market leader in all-SSD storage systems designed for next generation data centers. Leveraging SolidFire’s all-flash architecture, with volume- level Quality-of-Service (QoS) controls, customers now can guarantee storage performance to thousands of applications within a shared infrastructure. Coupling this functionality with in-line data reduction techniques and system-wide automation results in substantial capital and operating cost savings relative to traditional storage systems. Watson Wheatley Financial Systems, Duncan Wheatley, managing director // T:+44 (0)1608 649640 // [email protected] // www.watsonwheatley.com // Marston House, Cromwell Business Park, Chipping Norton, Oxfordshire, OX7 5SR Watson Wheatley is a reconciliation software specialist with extensive knowledge of hedge fund operations. Its flagship product i-Recs was specifically designed for the hedge fund market having been originally developed for one of the largest alternatives managers in Europe. i-Recs has a unique accounting engine underpinning the product which enables fully integrated trade and cash reconciliations and has the ability to calculate total equity on margin traded instruments. Packaged with i-Recs is a powerful data aggregation tool allowing interface on-boarding in a fraction of the time of traditional solutions. WWFS offers a user-based pricing model with no up-front licence costs. Sentronex, Joe Sluys, CEO // +44 (0) 207 397 7400 // [email protected], 42 Southwark Street, London, SE1 1UN, www.sentronex.com Delivering expert, outsourced IT services bespoke to London’s financial community, Sentronex is committed to providing the best of the following services: IT Support, Disaster Recovery, Financial IT Consultancy, Cloud Computing, Hosting and Connectivity. Sentronex’s rapid growth since launching in 2005 is down to a winning combination of specialist technical knowledge and the extensive, fully-managed facilities we offer including multiple Disaster Recovery sites and a state-of-the-art Data Centre. Sentronex looks after an impressive range of FCA regulated clients spanning both the buy and sell-side. With Sentronex, there is no such thing as a one-size-fits-all approach; every solution is tailored to meet the individual needs and requirements of each financial firm. James Pinnington, Head of Hedge Fund Sales // T: +44 (0)20 3320 5750 // [email protected] For more information about Misys Sophis products, please contact: [email protected] // www.misys.com Misys Sophis has more than 25 years experience in providing fully integrated cross-asset portfolio and risk management solutions to the world's leading financial institutions. Sophis VALUE is Misys’ flagship system for alternative investment and provides a single solution for portfolio management, performance measurement, investment accounting, risk management, reporting, compliance and data management together with the required connectivity to third parties such as prime brokers, custodians and administrators, as well as trading (EMS/OMS), clearing and matching systems. USA: Branden Jones, 800 Third Avenue, 39th Floor, New York, NY 10022 // T: +1 (212) 293-1836// [email protected] Liquid Holdings Group is a cloud-based technology and managed services provider to the global hedge fund and active trading markets. We provide hedge funds and other asset managers with the best way to de-risk their business, enhance decision-making, improve transparency and ultimately put more money into their investors’ pockets. While our business is new, our technology has been used for over six years by the most demanding institutional portfolio managers and traders, and its adoption rate is strong with over 45 clients and growing. We are headquartered in New York with offices in Hoboken, Aventura and London. Jim Serpi – London // T: +44 (0) 20 7821 4950 // [email protected], Andre Fundora – New York // +1 646 385 7554 // Suite 26, 2 Station Court, Imperial Wharf, London SW6 2PY // www.matscosolutions.com Matsco Solutions Group, established in 2002, is the trusted IT support partner for hundreds of hedge funds and alternative investment firms across Europe, the United States and Asia. Specialising in hedge fund technology, Matsco Solutions provide best-of-breed industry solutions to its clients including private cloud services, business continuity planning, specialist start-up services, technology design, support and monitoring, virtual CTO services and a 24/7 engineer staffed helpdesk. The company was co-founded by Patrick Ferrall and Jim Serpi, who bring a wealth of industry experience, and has offices in London, New York, Stamford, San Francisco Bay, Hong Kong, Singapore and Beijing. T E C H N O L O G Y SERVICES DIRECTORY 2 5 S E P – 1 OC T 2 01 4 3 0 HF MWE E K . COM To promote your company, email: director [email protected] or call UK +44 (0)20 7832 6615 // US +1 (212) 268 4919 Orb Employee Benefits // Contact: Geraint Williams, Director // T: 0845 0138709 // [email protected] // www.orb-eb.co.uk Orb is a highly experienced team of workplace pension and employee benefits consultants, specialising in helping hedge funds and their service providers develop effective employee reward programmes. workplace pensions & auto-enrolment - healthcare & dental - life assurance & income protection - keyman & partnership protection - travel insurance Combining the knowledge you would expect from a large business with the personal approach of a smaller firm, we are committed to providing excellent client service. Don’t just take our word for it - 97% of our clients say we are extremely or very responsive. One Ten Associates 1 Berkeley Street, London, W1J 8DJ Contact: Mush Ali (ACA), Director // T: +44 (0)20 7016 9910 // [email protected] www.onetenassociates.com One Ten Associates is a specialist recruitment firm that services the permanent and temporary needs of the alternative/fund management sector. Our consultants have been in this sector for over ten years and have the network to cover your strategic senior hires as well the junior to mid- senior needs. E M P L O Y E E B E N E F I T S S H A D O W - A C C O U N T I N G David Ross, Global Head of Marketing // +1 732-318-7109 // [email protected] // Jonathan White, Business Development USA // +1 646-861-3409 // [email protected] // Ranjan Mishra, Business Development UK +44 (0)20 7016 9170 // [email protected] // Bangalore +91 80 30982200 // Mumbai +91 022 30952200 We support a full range of administration, middle office and accounting services for investment managers. Tailored for each manager’s specific requirements, our Best Thinking and Best Practices help managers grow. We offer customized Straight Through Processing and integrate post-trade operations across virtually every asset class, currency, border, or structure you can imagine. Our deep operational and accounting expertise backed by state of art technology enables a high degree of control via automation in a 24 hour, 6 days a week global delivery model. The result is a new level of scalability and flexibility to help you grow. ACA Compliance Group (Europe) Ltd // 11 Berkeley Street, Mayfair, London, W1J 8DS // www.acacomplianceeurope.com Ron G Weekes, Chief Executive // T: +44 (0)20 7042 0500 // [email protected] Damon Zappacosta // 589 Eighth Avenue, 7th Floor New York, NY 10018, USA // T: +1 212 868 5940 ACA is the world’s largest independent compliance consultancy. Operating from 12 offices in America and Europe with a team of 140 – a third of which are former FSA, SEC or NFA (CFTC) regulators – ACA support over 700 clients including a third of the 100 largest hedge fund managers, four of the top five PE firms, large retail and long-only managers, asset management institutions, Trusts, brokers and smaller boutiques. ACA in London includes ex-FSA and ex-SEC examiners – a unique offering in Europe. Cordium // London (headquarters), NY, Boston, SF, HK // UK: Sarah Donnelly // T: +44 (0) 203 141 9658 // [email protected] // USA: Hannah Weinstock Gallagher // T: + 1 212 515 2800 // [email protected] www.cordium.com Cordium is the leading global provider of regulatory compliance consulting, accounting and tax services and software to the asset management and securities industry. Today, Cordium has offices in London, New York, Boston, San Francisco and Hong Kong and employs more than 170 experienced professionals who support more than 1,500 investment businesses. Our clients range from start-ups to large firms with well-established track records. Our asset management and securities sector focus means we always bring direct, relevant experience to advising our clients, helping them to meet their compliance and regulatory challenges and turning regulatory compliance into a must-have business advantage. C O M P L I A N C E C O N S U L T A N T S G O V E R N A N C E Robert Quinn // Managing Director // [email protected] // 42 Brook Street, London W1K 5DB // www.robertquinn.co.uk T: +44 (0)207 958 9127 Robert Quinn Consulting is a London-based premier financial compliance consultancy. We specialise in integrated FCA and SEC compliance programmes and both UK and US financial regulatory compliance to institutional and asset management clients worldwide. Robert Quinn Consulting was founded in 2007 with the goal of providing pragmatic guidance and responsive customer service to our clients. Our dedicated team allows us to be a focused resource contributing to your success. ManagementPlus // Kavita Thomas, Manager // email: [email protected] // Tel: + 352 2747 4724 Operating from our strategic locations in Luxembourg, the Cayman Islands, Singapore, New York and London, we are a leading independent provider of fiduciary and oversight services to the international funds industry, well recognised by the institutional investor community. Core services include independent directors, UCITS and AIFM management company solutions and Luxembourg conducting persons. The independent directors are a panel of carefully selected, highly skilled directors from diverse and relevant backgrounds, available around the globe to suit clients' needs. R E C R U I T M E N T Darren Gordois & Peter Peacock // +44 (0) 20 3137 8140 // [email protected] or [email protected] // www.mondrian-alpha.com // 5 London Wall Buildings, London, EC2M 5NS Mondrian Alpha Recruitment Solutions provides innovative human capital solutions & research, market intelligence and competitor analysis to our clients. Our hedge fund coverage includes: sales & marketing, trading & structuring and infrastructure (operations, finance, legal & compliance). We pride ourselves on delivering complete, targeted and fast execution across our product suite. Please call in or email us to discuss your requirements. Chris Apostolou, Director // +44 203 371 0889 // [email protected] // www.arbitrage-search.com Arbitrage Search specialises in macro for hedge funds and banks, please call to discuss Providing the complete DNA infrastructure for funds Peter Hughes Group Managing Director Tel: +44 7780 997609 [email protected] Thalius Hecksher Global Head of Business Development Tel: +1 305 646 1086 [email protected] apexfundservices.com © UBS 2014. All rights reserved. Whether you have your own European management company or need the services of one. If you want a full depositary solution or just a ‘lite’ solution. Regardless of how many EU countries you do business in or how many prime brokers you use. We will work hard lo help you achieve your goals, developing your customized AIFMD reporting and passporting solutions. We look forward to partnering with you. Contact us at [email protected] or go to www.ubs.com/fundservices Does your fund services partner have the AIFMD solution you need? 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