Institutional Hedge Fund Investing Comes of Age

If you haven't had a chance to browse through the GAIM Ops Cayman site yet we want to bring your attention to two great resources you perhaps haven't see yet:

Our exhibit partner, SEI Knowledge Partnership offer us their insights on Institutional Hedge Fund Investing Coming of Age

And our event partner, Deloitte, gives us a scope of Deloitte in the Cayman Islands.

We invite you to take a look.

How to Proactively Seize the Spotlight When Your Hedge Fund Makes the Front Pages

Recently there's been story after story in the media about possible insider trading within the hedge fund industry. The Keys to survival?

• Comprehending the crisis and communication protocols
• Handling press inquiries appropriately
• Managing confidential information
• Identifying when to retain outside assistance

We invite you to join us for the "Proactively Seizing the Spotlight When Your Fund is on the Front Pages" session in the "New Products/Markets and Industry Developments" track of the 6th Annual GAIM Ops Cayman to discuss and explore this critical issue more with Steve Bruce, Managing Partner at ASC Advisors, LLC, Carolyn Miller, Former GC at the Galleon Group, and Daniel Gagnier, Managing Director of Sard Verbinnen.

Click here to learn more about the 6th Annual GAIM Ops Cayman

Join us at GAIM Ops Cayman in May

With the early bird savings expiring this week, we wanted to share some new information with you about the event. We’re on track to beat previous pre-Recession attendance records (that means a sell out!)

You should plan to attend this program to get updated on the current topics of the day, catch up with old colleagues, make new acquaintances and meet with your Cayman partners, all at the same time.

If that isn’t enough, the following experts have signed on to join us to work through key industry issues such as translating new regulation ala Dodd Frank with 5 hours of practical guidance, and ensuring an air tight due diligence and compliance process.

• Julianne Recine, Director of Operational Due Diligence, SCIENS CAPITAL MANAGEMENT
• James Newman, Head of Operational Due Diligence, BARCLAYS WEALTH
• Nicholas Denton-Clark, Managing Director and Chief Compliance Officer - Americas, PINEBRIDGE INVESTMENTS LLC
• Rick Leifels, Head of Operational Due Diligence, TITAN ADVISORS
• Bruce Berger, COO/CFO, ATLANTIC INVESTMENT MANAGEMENT, INC.
• Ken Weiller, Chief Operating Officer, SABA CAPITAL MANAGEMENT, L.P
• Marc Baum, General Counsel, SERENGETI ASSET MANAGEMENT
• Don Seymour, Managing Director, DMS MANAGEMENT LTD.
• Bikram Singh, Global Head OTC Derivative Services, CITI
• Steve Bruce, Managing Partner, ASC ADVISORS, LLC
• Bryan J. Morris, Former Assistant Chief Accountant - Division of Investment Management - SEC, AERS Partner DELOITTE & TOUCHE
• David Nable, Vice President, GOLDMAN SACHS
• Michael DeJarnette, President, NORTHPOINT TRADING PARTNERS, LLC

Make the Most of Your Conference Dollar - 10 Hours of Formal and Informal Networking Including:

Hosted VIP Speaker Roundtables:
Continue learning during lunchtime as you join a speaker hosted lunch table

C-level only Sessions:
Share your thoughts with your peers in a closed door sessions that promote brainstorming and getting to know your fellow participants.

Champagne Roundtables:
End the day informally as you share off the record war stories on current issues facing the industry with other conference attendees.

Business Card Exchange:
Make sure you catch up with every attendee at the event by Joining peer to peer networking during the business card exchange.

Due Diligence Challenge:
Test your knowledge in a new game show format. This session will enhance your conference experience as you find out if you can answer the questions correctly

GAIM Ops Cayman is the premier event strengthening operational due diligence in response to game changing industry trends. Take advantage of this opportunity to meet and network with the best in the industry.

Visit www.GAIMOpsCayman.com to learn more.

Exclusive Prison Interview: Bernard L. Madoff Speaks to the Gray Lady

In his first interview since his arrest in December of 2008, Bernard Madoff tells the New York Times, “that unidentified banks and hedge funds were somehow “complicit” in his elaborate fraud, an about-face from earlier claims that he was the only person involved.”

The article notes that during the private two-hour interview, Madoff went on to say, ““They had to know, but the attitude was sort of, ‘If you’re doing something wrong, we don’t want to know,” and yet he did not say “that any specific bank or fund knew about or was an accomplice in his Ponzi scheme, which lasted at least 16 years and consumed about $20 billion in lost cash and almost $65 billion in paper wealth. Rather, he cited a failure to conduct normal scrutiny.”

The interview and the research conducted were part of the reporter’s leg work for an upcoming book, “The Wizard of Lies: Bernie Madoff and the Death of Trust,” out for publication this spring. You can read the full length article here.

Clearly, this case only serves to reinforce that the importance of operational due diligence before any investment is made is paramount. Most due diligence professionals would have identified problems with investing in Madoff Funds.  Since Madoff...there has been more awareness of the need for strong due diligence. To explore more related topics and test your knowledge in the Due Diligence Challenge, join us at the 6th Annual GAIM Ops Cayman.

Let us know what you think: Do you believe Mr. Madoff?

Finance + Social Media =

So the verdict is in - social media makes sense. Many companies are embracing it as a mainstream business practice. How about Finance? Where do you stand on social media?

In a recent article at CFO.com Dave McCann states "Amid the chatter, companies are beginning to achieve tangible benefits".

He gives a few examples such as Ford:
Ford Motor was preparing last year's North American launch of the Fiesta, it didn't just make social media part of its strategy: its initial marketing push relied solely on social media. The automaker supplied Fiestas to a mere 100 people to drive for six months. But they were the right 100 people, so-called digital influencers (bloggers, podcasters, YouTube celebrities, and automotive journalists) who cranked out videos, tweets, blog posts, photos, and other media relating to the car.

Old Spice:
2010's Old Spice's "Smell Like a Man, Man," became a viral video sensation after being posted on YouTube and Facebook, racking up more than 100 million views in five months.

And some others, but failed to include any information about how financial institutions are using or NOT using social media.

I think banks, credit card companies and others should be using social media to its fullest; either by listening to their customers and doing customer service via social or setting up communities where users can get info quickly and share positive word of mouth experiences about that financial service.

Here is a PPT presentation I found which addresses some of my questions.

How Financial Institutions Can Use Social Media to their Advantage

View more presentations from Ryan Buchanan.

At the end of the day I think with proper training and setting up expectations financial institutions should be using social media to some degree.

David even included some stats in his article:


A 2010 study by communications firm Burson-Marsteller found that 65% of the largest global companies had Twitter accounts, 54% had Facebook fan pages, and 50% had YouTube video channels. And research firm Gartner predicts that by 2014, social media will have surpassed e-mail as the primary communication vehicle for a fifth of business users.

By 2014; Gartner predicts that SM will surpass email as the primary communication method. Wow - Finance are you prepared?

Hedge Fund Strategy Interview Steinbrugge

Jan. 24 (Bloomberg) -- Don Steinbrugge, chairman of Agecroft Partners, talks about his investment strategy for hedge funds. Steinbrugge speaks with Lisa Murphy on Bloomberg Television's "Fast Forward." (Source: Bloomberg)

-- Steinbrugge Likes Long-Short Equity, CTA Hedge Funds: Video

Will you be starting a hedge fund in 2011?

A hedge fund refers to an investment company that is unregulated. It is usually riskier than traditional investment funds such as mutual funds, and hedge funds take long and short positions in bonds, stocks, commodities and other investment products. There are profits to be made from starting your own hedge fund business. Hedge funds generally cater to sophisticated investors with large amounts of capital such as very wealthy individuals, pension funds and university endowments.

It can be quite complex to start your own hedge fund. Not anymore – we’ve given you the steps below (thanks VF) You should have a lot of experience in investments. However, you can seek advice from a qualified lawyer to help you. They can give you support in drafting an operating agreement for your hedge fund as well as determining the corporate structure for the business.

As per this article

Step 1. Create a hedge-fund team!
Step 2. Name your fund!
Step 3. Hire a law firm!
Step 4. Get that anchor capital!
Step 5. Get a prime broker!
Step 6. Check into your very own hedge-fund hotel!
Step 7. Hire a good P.R. person!

So again – are you going to start your own Hedge Fund in 2011? If yes, you should be going to the 6th Annual GAIM Ops Cayman conference to meet indsutry peers and really learn the ins and outs of the hedge fund industry.

The Premier Event Strengthening Operational
Due Diligence in Response to Game Changing Industry Trends
The hedge fund industry is in a state of flux due to new regulations, industry consolidation, difficulty in attracting new capital and increasing investor demands. The 6th Annual GAIM Ops Cayman will educate and inform you on these critical issues and give you the opportunity to discuss how they will change due diligence and compliance processes moving forward.

New for 2011
- Comprehensive Regulatory Guidance
- With over 5 hours of in-depth coverage and peer to peer discussions
- OTC Derivative Rules
- Implications of Hedge Fund Registration
- Ramifications of Dodd Frank Act
- Surviving an SEC Exam
- SEC, FSA and CIMA Updates
- Impact of the Volcker Rule
- How to Recover Assets from Wind-Up Petitions
- Tailor Your Due Diligence Interviews
- Examine Emerging Managers with Little or No Prior Hedge Fund Experience
- Verify Independence of Counterparties and Evaluate Whether an On-Site Visit is Required
- Examine Emerging Managers with Little or No Prior Hedge Fund Experience
- Expose Potential Conflicts of Interest that Jeopardize Future Investors
- Align Your Business With Next Generation Due Diligence Practices
- With 28 Comprehensive Panel Discussions and Working Groups
- Candid discussions from the Investor Perspective
- Why Fund of Funds Might Not Invest in Your Fund
- Expose Potential Conflicts of Interest that Jeopardize Future Investors

img credit: http://www.hedgeco.net

Today's hedge fund industry news

Hedge fund industry news for Tuesday, Jan. 11, 2011:

Ackman’s Pershing Square LP Fund up 29.7% in 2010. (Dow Jones Newswires)

Someone recorded that speech Max Holmes gave about how to send sketchy emails without getting caught. (Clusterstock, HT to Teri Buhl)

Hedge funds focused on Bric gain over 13% in ‘10. (Financial Chronicle)

Nine Masts Investment Fund returns 20%. (Bloomberg

Hedge funds pinched by health care reform. (DealBook)

Tiffany and Adobe on Bernheim, Drefus’s list of potential 2011 takeover targets. (HedgeWeek)

Dow Jones Credit Suisse index up 11% in 2010. (FINalternatives)

SKCG survey shows hedge funds pay more, get less from health insurance plans. (FINalternatives)

Brevan partners split £204 million. (FINalternatives)

Headstart launches emerging markets fund. (FINalternatives)

People moves

FBR Capital Markets appoints new head of distressed sales. (HousingWire)

Tower Research vet DeGiacinto sets up hedge fund shop. (FINalternatives)

The 6th Annual GAIM Ops Cayman conference will examine the critical changes affecting the hedge fund industry and discuss how it will change due diligence, compliance and risk management procedures going forward. In 2010, attracting new capital has been difficult because investors have become increasingly more sophisticated. Savvy Fund-of- funds and hedge funds must enhance their due diligence process to focus on:

Latest Regulatory Changes

• Impact of Hedge Fund Registration
• Changes in OTC Derivative Rules
• Understanding the Examination Process
• Global Legislation Implications
• Shifting Focus at the SEC
• New Pay to Play Rules

Impact of Latest Trends on Due Diligence and
Compliance including:

• Rise of Seeding Funds
• Implications of the Economy
• Evaluating Conflicts of Interest
• Understanding UCITS
• Hedge Fund Redomicilation
• Trends in Prime Services
• Independent Board Members
• Ensuring Compliance with Fund Documents

Keynote Speakers

GAIM Ops Cayman provides an unrivaled opportunity to:

• Stay updated on the latest regulatory changes affecting hedge funds
• Implications of the Economy
• Network with over 100 Speakers representing the majority of due diligence reviews performed in the industry
• Meet with your Cayman Partners while you attend the conference

Are you registered for this event? Click here to learn more now.

Don't forget to join the linkedin group to engage with like minded peers: http://linkd.in/gA4yMY

The Difference Between Hedge Funds

In this video interview from the Financial Post Jonathan Chevreau asks David Kaufman, President of Westcourt Capitals what the difference is between hedge funds. Jonathan begins by stating that there are 2 hedge funds, including one that doesn't even hedge. Make sure to check out the 5 minute clip below.

US Treasury Will Reach Decision on Foreign Exchange Swaps by July

As an addendum to last week's post on the SEC and CFTC's new push for more transparency on real time reporting of swap trades, a new article in Reuters details how the US will be set to decide if to exempt foreign exchange swaps and forwards from these new derivatives regulations. The US government is going through all legitimate comments made by the public that argue a risk involved.

Politicians criticize that if such exemptions were to be honored it would create loopholes in the system. What do you think?