joyayqphillip-blog - Tumblr blog

[joyayqphillip-blog]

Role of hedge-fund boards gains importance in face of compliance, legal pressures

By Judith Gross, Contributing Author. The views expressed are her own. NEW YORK, Oct. 7 (Thomson Reuters Accelus) - The role of directors on offshore hedge funds has often been, at best, a limited oversight one, with perfunctory meetings and a limited interchange with the fund itself during the year. That has been changing – slowly – as compliance moves to the top of the list of concerns for investors and managers alike. In addition, directors themselves are realizing that the status quo is no longer tenable. Hedge funds advised by U.S.-based investment advisers tended to only have a board of directors if they were domiciled outside of the United States, since it is a legal requirement in most offshore jurisdictions, but not in the United States. In other words, it has been atypical to see a board of directors on a U.S. fund. But an offshore fund in a place such as the Cayman Islands, the biggest domicile of hedge funds in the world, would certainly have a board of directors. There are several reasons why this scenario has changed. Recent litigation has ensnared directors, pushing them into playing a more active role. For example, in a recent Cayman Islands Grand Court decision of a fund fraud case, Weavering Macro Fixed Income Fund Limited v. Sefan Peterson and Hans Ekstrom (August 2011), two “independent” directors were ordered to pay $111 million for willful neglect and failing to carry out their duties. Even though these two directors may not have been “independent” in the technical sense, the judgment was based on the fact that they “did nothing and carried on doing nothing for about six years,” as the justice in the case noted. What should compliance professionals, investment managers and investors alike look for in a well-functioning board of directors? Here are some areas to focus on in making this determination: Is the board receiving relevant information on a timely basis? That is, do they have the information that they will need to perform their oversight role? Are the board meetings substantive, with a full agenda and detailed minutes? This indicates a board that is engaged, as opposed to playing a perfunctory one. Is the board viewed as an integral part of a fund’s operations? Is the board used as a resource, and do the directors have the necessary experience and knowledge to be a resource? When a problem arises, the board can play an important role in providing guidance and decision-making. Are the board fees significantly lower than industry standards? While it is important to keep operating expense down, excessively low board fees may indicate a lack of engagement by the board members. While no two boards will have completely similar procedures and levels of involvement, as the role of hedge fund boards move closer to the standard set by independent fund boards in the United States, hedge fund advisers will need to add this area to their list of compliance and management concerns. Having the board act as a rubber stamp is no longer an option. (Attorney Judith Gross is the principal and founder of  JG Advisory Services LLC, with a background in government affairs, securities law and the hedge-fund industry).

[joyayqphillip-blog]

CVC's Virgin Active acquisition cleared in EU

The European Commission said in a statement the deal would not raise any competition concerns."Autobar and Colomer have limited market shares on their respective markets concerned and their products are not key drivers of consumer demand in health and fitness centres," the EU executive said.CVC controls vending machine operator Autobar and cosmetics supplier Colomer, which operates in Virgin's fitness centres.Virgin Active has 254 clubs with 1.1 million members in Britain, South Africa, Italy, Iberia and Australia.

[joyayqphillip-blog]

Samsung to unveil new Android model Oct 19 after delay

"We are unpacking our new Android phone in concurrence with Google," Samsung said in a statement on Friday, without disclosing the name of the new gadget.Apple and Samsung are engaged in a bruising legal battle that includes more than 20 cases in 10 countries as the two jostle for the top spot in the smartphone and tablet markets. Apple is also the biggest customer of Samsung, buying mainly chips and displays.Apple's new iPhone 4S finally went on sale in stores around the globe on Friday, with fans snapping up the final gadget unveiled during Jobs' lifetime.A U.S. judge said on Thursday Samsung's Galaxy tablets infringe Apple iPad patents, but also that Apple has a problem establishing the validity of its patents.

[joyayqphillip-blog]

UPDATE 1-France says EFSF should be turned into a bank

* Idea is to avoid a credit event; selective default manageableBy Daniel FlynnPARIS, Oct 13 (Reuters) - France believes the euro zone's EFSF rescue fund should be turned into a bank to leverage its firepower and Greek bondholders will have to accept losses higher than 21 percent, a finance ministry source said on Thursday."We think that obviously the most solid way (of leveraging the EFSF) is for the fund to become a bank so that, in collaboration with the ECB, it could leverage itself," said the source."This hypothesis is uncertain because the ECB has already issued a negative opinion on it. We continue to talk: that is what would work best."Many analysts agree the most effective way to give the 440 billion euros European Financial Stability Facility more muscle would be to treat it as a bank, making it eligible to borrow at the European Central Bank's regular funding operations.But both the ECB and Germany have strongly opposed the central bank's involvement."The idea is not to have 2 trillion euros in the fund, it's to have a leverage effect by using other European or international institutions," the source said. "If a state puts in one (to the fund), we could have three or four times that from other partners."Euro zone officials told Reuters on Wednesday that banks would be asked to write down between 30 and 50 percent of their Greek debt holdings as part of a revised plan to avert a disorderly default.The French source said it was important that the larger haircut on Greek debt, which should be announced as part of a package unveiled at an Oct. 23 European Union summit, should not trigger a credit event on Greek debt, requiring the payment of credit default swaps."It will probably be higher than 21 percent. We are discussing the level so that it can be acceptable and sustainable," the source said.The source said EU policymakers were also looking at how a more leveraged rescue fund could be used to insure against losses on sovereign debt, for example on Italian bonds, by offering partial guarantees."The European fund could be used to cover (bondholders) losses which would justify them staying invested."Regarding this weekend's G20 finance ministers' meeting in Paris, the source said that the aim was to prepare a plan for rebalancing global growth prospects in the medium-term by agreeing on corrective measures by the seven member states found to have economic imbalances at an April meeting."That will not be announced here (in Paris)," said the source. "By Cannes, each country will announce two or three steps ... which will have an impact on the real economy."The source also said he was confident an agreement could be reached on the terms for China's yuan to enter the basket of currencies underpinning the IMF's Special Drawing Right.It would be down to the Chinese, however, to specify a timetable for meeting the criteria, he said.

[joyayqphillip-blog]

Raiffeisen says second half not looking good - paper

"I think that the second half of the year will be significantly worse than the first half," he told daily Wirtschaftsblatt in comments published on Thursday, when asked about the full-year outlook."On the whole, eastern Europe is going well, in reality there is just one problem -- Hungary."