Articles By Topic
By Topic: Best Practices
-
From Vol. 2 No.16 (Apr. 23, 2009)
Will Hedge Fund Industry Self-Regulatory Codes, Such as the “Standards” Promulgated by The Hedge Fund Standards Board, Preempt Additional Hedge Fund Regulation or Complement It?
The increasingly frequent and occasionally shrill calls for government regulation of the hedge fund industry often ignore an important fact: the industry itself has promulgated various codes of conduct and best practices that are significantly more detailed, practicable and equitable to the various affected constituencies than any bill or rule thus far proposed in the U.S., U.K. or other jurisdiction. In the U.S., the President’s Working Group on Financial Markets in January issued its final reports on hedge fund best practices; the practices, if adopted, are intended to reduce systemic risk and improve investor protection. See “President’s Working Group Releases Final Best Practices Reports for Hedge Fund Managers and Investors,” The Hedge Fund Law Report, Vol. 2, No. 5 (Feb. 4, 2009). Along similar lines, the Hedge Fund Standards Board (HFSB) in the U.K. has adopted standards developed by the Hedge Fund Working Group, a predecessor organization, covering, among other things, disclosure, valuation, risk management, fund governance and shareholder conduct. Like the PWG, the HFSB is a voluntary, market-led initiative. For hedge funds, these various codes of conduct raise important issues, including: precisely how the codes operate; the pros and cons of signing on; similarities and differences between the different codes; and whether compliance with the codes will be required, either by law or the institutional investor market. This article explores each of these issues.
Read Full Article … -
From Vol. 2 No.5 (Feb. 4, 2009)
President’s Working Group Releases Final Best Practices Reports for Hedge Fund Managers and Investors
On January 16, 2009, two private sector committees, the Asset Managers’ Committee and Investors’ Committee of the President’s Working Group on Financial Markets released their final best practices reports. Drafts of each report were originally released on April 15, 2008 (as we reported in our April 29, 2008 issue) and were open to public comment for 60 days. The President’s Working Group modified the reports in response to comments received during the comment period and to address interim developments in global financial markets. Overall, the reports provide a comprehensive set of best practices for hedge fund managers and investors that are designed to reduce systemic risk and improve investor protection. We provide a detailed discussion of the material provisions of both reports.
Read Full Article … -
From Vol. 2 No.5 (Feb. 4, 2009)
What Has the Asset Managers’ Committee Report to say about Hedge Fund Valuation, Side Letters and PPM Updates?
As the ground continues to swell, especially in Washington, around the ideas of transparency and accountability in hedge fund practices, the Asset Managers’ Committee of the President’s Working Group on Financial Markets released on January 16, 2009 its final report on best practices for the hedge fund industry. To complement the detailed discussion of the Asset Managers’ Committee Report included in this issue of The Hedge Fund Law Report (see above), we delve deeper into three areas of the Asset Managers’ Committee Report, in the conviction that they can have a fundamental effect on hedge funds and their managers if the best practices outlined in the Report become law or rule, or acquire, de facto, the force of law or rule: valuation, side letters and private placement memorandum updates.
Read Full Article … -
From Vol. 1 No.11 (May 13, 2008)
Institutional Investors Likely to Insist that Hedge Fund Managers Adopt Best Practices
Similar to the response of UK institutional investors to the UK Hedge Fund Working Group’s best practices report, US institutional investors are likely to require hedge fund managers to adopt the best practices embodied in the PWG's private sector committee reports.
Read Full Article … -
From Vol. 1 No.11 (May 13, 2008)
KPMG White Paper Summarizes Attitudes of UK Institutional Investor Community to UK Hedge Fund Working Group Best Practices Report
- According to a KPMG study, UK institutional investors are enthusiastic about best practices standards promulgated by the UK Hedge Fund Working Group.
- More than half of UK pension fund fiduciaries surveyed indicated that they would require hedge fund managers to comply with the standards within three years, and in the same period UK pension funds expect to double their asset allocations to hedge funds, from 4% to 8%.
-
From Vol. 1 No.9 (Apr. 29, 2008)
President’s Working Group’s Asset Managers’ and Investors’ Committees Release Best Practices Reports
- On April 15, 2008, two private sector committees established in September 2007 by the President’s Working Group on Financial Markets released separate yet complimentary sets of best practices for hedge fund asset managers and investors.
- The Asset Managers’ Committee Report counsels hedge funds to take a comprehensive approach to strengthening practices in “all phase of their business,” emphasizing controls and enhanced procedures in five critical areas: disclosure, valuation, risk management, trading and business operations and compliance, conflicts and business practices.
- The Investors’ Committee Report contains two parts - a Fiduciary’s Guide for fiduciaries considering an investment in hedge funds on behalf of their principals (e.g., pension funds), and an Investor’s Guide for executing and administering a hedge fund program.
-
From Vol. 1 No.5 (Mar. 31, 2008)
New York Court Denies Privilege for Communications Relating to the Common Interest of Joint Venture Partners Represented by the Same Counsel
- Unpublished opinion holds that in the case of joint attorney representation of co-venturers, attorney-client privilege may not be raised to prevent disclosure of communications relevant to the common interest of former joint clients in subsequent litigation.
- Case suggests that hedge funds entering into joint venture arrangements should consider retaining separate counsel or carefully define the scope of the representation in the engagement letter.
- Privilege takes effect only after the co-venturers’ interests clearly diverge.