Alpha Finance Advisors » UCITS http://www.alphafinanceadvisors.net/blog Independent portfolio analysis to better understand, manage and articulate risk Mon, 11 Feb 2013 11:02:19 +0000 en hourly 1 http://wordpress.org/?v=3.0.1 Weavering judgment: an alarm bell for NEDs http://www.alphafinanceadvisors.net/blog/weavering-judgment-an-alarm-bell-for-neds/ http://www.alphafinanceadvisors.net/blog/weavering-judgment-an-alarm-bell-for-neds/#comments Wed, 29 Aug 2012 16:02:51 +0000 admin http://www.alphafinanceadvisors.net/blog/?p=352 Continue reading →]]> Last year judgement in the Cayman courts should still be resounding loud and clear in the mind of NEDs of hedge funds of course, but also of any Asset Management company. the AIFMD will likely hammer that point in further. These conclusions are at the heart of our creed and insist on risk governance and infrastructure. We have summarized some important points in the attached document and we hold a full copy available to those of you who might want to read it “in the text”.

Weavering judgment_ a warning for NEDs

]]> http://www.alphafinanceadvisors.net/blog/weavering-judgment-an-alarm-bell-for-neds/feed/ 0 Changes to Leverage Calculation for Collective Investment Schemes http://www.alphafinanceadvisors.net/blog/changes-to-leverage-calculation-for-collective-investment-schemes/ http://www.alphafinanceadvisors.net/blog/changes-to-leverage-calculation-for-collective-investment-schemes/#comments Mon, 20 Aug 2012 15:55:58 +0000 admin http://www.alphafinanceadvisors.net/blog/?p=349 Continue reading →]]> the CSSF August newsletter clarifies what is expected from Collective Investment Schemes registered in Luxembourg for the calculation of leverage.

it is now compulsory for all such funds to use the notional based approach for all derivatives. It is of immediate effect for new funds and has to be  in place – and prospectus amended - by year end for all existing funds.

]]> http://www.alphafinanceadvisors.net/blog/changes-to-leverage-calculation-for-collective-investment-schemes/feed/ 0 Happy New Year http://www.alphafinanceadvisors.net/blog/happy-new-year/ http://www.alphafinanceadvisors.net/blog/happy-new-year/#comments Sun, 15 Jan 2012 10:00:19 +0000 admin http://www.alphafinanceadvisors.net/blog/?p=274 New Year 2012

]]> http://www.alphafinanceadvisors.net/blog/happy-new-year/feed/ 0 Europe, Regulations and Hedge Funds… It is time to make plans, the clocks are ticking http://www.alphafinanceadvisors.net/blog/europe-regulations-and-hedge-funds-it-is-time-to-make-plans-the-clocks-are-ticking/ http://www.alphafinanceadvisors.net/blog/europe-regulations-and-hedge-funds-it-is-time-to-make-plans-the-clocks-are-ticking/#comments Mon, 28 Mar 2011 10:04:05 +0000 admin http://www.alphafinanceadvisors.net/blog/?p=161 Continue reading →]]> Europe, Regulations and Hedge Funds…

It is time to make plans, the clocks are ticking

UCITS, AIFMD, Private Placement rules in Europe are very topical subject at the moment. And many people find it quite a daunting task to try to understand what the options are, what the implications are and quite simply which path to follow in the mine field of ever changing regulations.

Bottom line is it is going to be extremely difficult to avoid all kind of regulation in Europe; this is if the fund intends to be distributed in Europe. The good news is that it will clarify the limbo in which many funds stand at the moment, and which distribution capabilities relay in pretty obscure and imprecise private placement rules. So give or take, in 2 to 3 years, every single fund in Europe will be regulated. And if it has found a way not to be, it will in any case have a very hard time being distributed; so very likely, AUM will suffer.

Some might think that there is quite some time before decisions have to be made.

It might be so. But the trend is for regulations to be tighter, not more accommodating. So waiting for new ones to come into force is a decision which is not free of consequences in itself. Take for example the case of UCITS regulations. We are now under the regime of UCITS III. Coming in the near future is UCITS IV; value July 1st. From July first, any new UCITS fund will need to be structured and launched according to the UCITS IV rules; pre-existing funds will have 2 years grace period to comply. So just in case you had in mind to launch one, it would be advisable to speed up the process and focus on it now.

Regardless, it is advisable to take a view as to the kind of status you want your fund to have in the coming years and prepare for it. The points to consider are numerous and decisions have to be taken carefully but the bottom line is going to be distribution. Who are your investors, what are they allowed to invest in and what are the regulatory consequences/impacts on them?  And further than that, which type of products are they going to be willing to invest in? UCITS is a piece of regulation that has been put in place to allow for retail distribution of investment products across Europe. Nevertheless, research indicates that institutions are the largest buyers by far of such products and this phenomenon extends to Asia, due to the “brand” appeal of UCITS funds. So it might be the case that you should consider it regardless.

In a similar vein, consideration needs to be given to the impact if solvency 2 on Insurance Companies and rippling effects on Pensions Funds. Having the appropriate structure might avoid being allocated to the “wrong” Equity Investment bucket…

Any choice will have its constraints and it is advisable to start drawing plans sooner rather than later.

Points to consider range from service providers, using a platform or going “on your own”, legal structure, investments regulatory constraints and limits monitoring, distribution channels…

But the rewards should be there for those who get it right.

]]> http://www.alphafinanceadvisors.net/blog/europe-regulations-and-hedge-funds-it-is-time-to-make-plans-the-clocks-are-ticking/feed/ 0 Just a few points on UCITS http://www.alphafinanceadvisors.net/blog/just-a-few-points-on-ucits/ http://www.alphafinanceadvisors.net/blog/just-a-few-points-on-ucits/#comments Mon, 07 Mar 2011 13:04:19 +0000 admin http://www.alphafinanceadvisors.net/blog/?p=144 Continue reading →]]> I sat in a seminar the other day where UCITS and more specifically Alternative UCITS were discussed and it became quite clear to me that there were a few misconceptions flying around. I just wish to clarify a few points:

- Purpose: the UCITS regulation was introduced to passport funds that are intended to retail distribution. No surprises that it does not naturally fit any type of strategies

- Liquidity: UCITS funds do not have to offer daily liquidity. Weekly or bi-monthly are perfectly acceptable

- Risk reporting: UCITS funds have to make sure they comply with the portfolio and risk rules as defined by the directive. They need to produce and store documents that prove this daily compliance. It is also critical to have some procedure in place to make sure breaches are handled as regulation requires and eventually reported as the case may be.

- Liquidity: is not 100% guaranteed with UCITS; they can suspend redemption and “gate” if circumstances dictate

- Security: some UCITS funds have turned sour…. there is no such thing as a total guarantee.

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