Capital Fund Formation
Given the current economic situation, it’s not surprising that financial executives say they’re more focused than ever on planning and cost cutting. What’s surprising, though, is a reluctance to adjust the finance function’s structure.
March 2015 | by Mr. John Olivier, Chief Investment Officer
The financial crisis seemed to mark a turning point in the spectacular growth of alternative investments, such as managed investments in hedge funds, private equity, real estate, commodities, and infrastructure. Poor performance and liquidity problems led to massive redemptions in several categories. By now, however, those problems have subsided, and alternatives are back on track. Globally, alternative assets under management more than doubled, to seven trillion dollars. This pace represents a compounded annual growth rate of fourteen percent over the period, far outstripping traditional asset classes.
To get ready for this burst of growth, most traditional asset managers we surveyed agree that they need to ramp up their risk-management skills and product expertise and to make some changes in their sales processes and incentives. Managers specializing in alternatives say that they too must prepare—mainly by adding customer-centric capabilities to their strengths in generating market-beating results.
Our deep day-to-day contact with regulatory bodies in key financial centers around the world and our close working relationships with prime brokers and various professional hedge fund industry associations ensures that we are plugged in to the daily pressure points experienced by hedge funds. In an era of unprecedented regulatory change in the investment management industry, we are focused on advising our clients on the potential impact of Alternative Investment Fund Management Directive in Europe and the US Administration Proposals. This deep level of industry connectivity allows us to provide the dynamic, responsive service from inception to downstream activity that our hedge fund clients have come to expect from us.
Funding Infrastructure Assets
The firm advises managers on fund establishment, structuring and marketing as well as ongoing operational issues, secondary transactions and restructuring mandates. We also actively advise our clients on their licensing and regulatory requirements, an area which has seen significant interest given the unprecedented regulatory change in the investment management industry, including the impact of the EU Alternative Investment Fund Management Directive, as well as ERISA and carry plan issues. The breadth of our experience means that we are particularly well-placed to advise managers (and investors) on appropriate and new fund terms and other hot topical issues in the industry. Increasing public scrutiny of the industry is also creating further opportunities to advise on compliance issues and changing codes.