Feed aggregator

Innovation key to success Submitted 01/10/2021 - 1:39pm

Luxembourg is widely regarded as a prime location for investment in private assets such as private equity, private debt, real estate and infrastructure. Much of its success in this field can be attributed to innovative investment vehicles which are success stories in themselves, and a perfect match for the dynamism of private assets investment.

A real trump card in the Grand Duchy’s hand is its limited partnerships (LPs) that complement the broad range of legal solutions available for structuring alternative funds and private asset transactions. Among them, the Société en Commandite Spéciale (SCSp) stands out as a multi-purpose solution for private assets. When Luxembourg introduced the SCSp in 2013, in a forward-looking move at the time of transposing AIFMD into national law, it provided the investment fund industry with a modern entity type that, to this day, scores with its wider scope and greater flexibility than options available in other jurisdictions. Unlike the ‘vanilla’ société en commandite simple (SCS), an SCSp has no legal personality and can exist merely by agreement between its partners, allowing the maximum flexibility in structuring with an efficient time-to-market, making it ideal for various set-ups. Overall, the SCSp has proved a hit among those in search of a non-regulated, transparent vehicle solution. It is insightful to notice that over the past two years, the numbers of SCSp increased by 85 per cent, according to PwC’s analysis.

Management passport

Another ace up Luxembourg’s sleeve is the the Reserved Alternative Investment Fund (RAIF). As a subset of AIF, it shares the manager-regulation regime’s key features without being directly subject to product approval by the regulator CSSF. Instead, it relies on an authorised external alternative investment fund manager and benefits from the management passport and the marketing of its shares, units or partnership interests to professional investors across the EU. The RAIF is now considered as one of the key pillars of the Luxembourg toolbox, offering the possibility to set up quickly an investment vehicle investing in any asset class.

This passporting concept, which contributed to making UCITS a successful global brand for retail investments, allowed AIFMD to also create a single market for alternative investment funds. While the UCITS regime has retail investors at its heart, individuals have limited access to the private assets universe. But that may change for more sophisticated retail investors. A review of AIFMD and MiFID is under way. Facilitating investments by these investors in private asset classes is part of the discussion.

Strong and steady

As the low-interest environment persists and certain private asset classes – private debt funds in particular – have been outperforming others with double-digit growth rates, it is no surprise that investor interest in less liquid, higher-returning assets has been strong and steady, not only from the institutional side, but also from individuals with a long-term view of their asset allocation.

In this context, the ongoing reform of the ELTIF regime introduced in 2015 to “boost European long-term investments in the real economy” is promising and one can expect that ELTIF may become a successful third pillar alongside AIFs and UCITS to supplement the offering to European investors, increasing substantially access to a certain private asset class by retail investors. 

Like this article? Sign up to our free newsletter Author Profile Related Topics Funds

Continuous growth of new private debt and real estate funds in Luxembourg Submitted 01/10/2021 - 1:35pm

The Grand Duchy is set to capture an important chunk of the growing global market for alternative investment funds.

Luxembourg’s role as an international financial centre goes back many decades. But its future as a services hub for asset managers looks brighter than ever.

For Marco Mondaini, Head of Depositary Services at Alter Domus in Luxembourg, there are powerful new segments of growth for the industry which appear highly favourable over the next few years.

Alongside its traditional strengths as a centre for domiciling mutual investment funds, he believes some of the biggest opportunities now lie in offering services for alternative investment products and in particular the upward trajectory of debt and real estate funds.

“Luxembourg’s reputation is already very well established in the mutual fund market. It has moved up the chain to become recognised as a centre of excellence for those funds to be distributed worldwide; Luxembourg-domiciled investment funds are distributed in more than 70 countries,” says Mondaini, a 30-year veteran of the Luxembourg fund management industry.

Before joining Alter Domus, Mondaini worked for CBP Quilvest reorganising their depositary services in Luxembourg. Prior to that, he served as Deputy General Manager of Bank of New York Mellon in Luxembourg for nine years, responsible for asset servicing and alternative investment services, business change management and corporate trust.

“The recognition Luxembourg receives helps support the distribution and provides confidence to investors globally around the use of Luxembourg products,” Mondaini says.

But over the last 10-15 years, the alternative investment space has developed rapidly, first with hedge funds and then private equity and other specialist funds, he adds.

Private debt market booms

Today, Luxembourg is rapidly earning a reputation for something else.

“Today, the debt fund sector is developing quite fast as traditional lending that goes through banks becomes more challenging,” Mondaini says.

“The cost of traditional lending for banks is increasing due to capital adequacy requirements which are driven in large part by regulations like Basel III, making it more difficult for banks to generate profits from lending. That’s why the banks are becoming more prudent and thus benefitting the private debt market.”

Just five years ago in 2016, the global private debt market was valued at about USD575 billion, according to figures from Preqin.

By the end of 2020, it had already reached USD848 billion with Preqin projecting it could be worth as much as USD1.46 trillion by the end of 2025.

For Luxembourg, that represents a growth opportunity for advisers and providers of domicile, management companies, depositary and fund administration services who specialise in assisting fund managers.

Mondaini estimates that 50-60 per cent of all private debt funds will be channelled through the Grand Duchy. Luxembourg fund vehicles cater to the broadest possible spectrum of investments, from senior to mezzanine loans, whole loans and syndicated loans, distressed debt, and convertible loans. The loans can finance any asset, from real estate and infrastructure to private equity, and the operational infrastructure in Luxembourg provides a robust framework for all of them.

“I think it’s a testament to Luxembourg’s ability to service those specialised funds and be able to structure them and offer expertise,” Mondaini comments. “Its stability and innovative mindset make it a key location for financial professionals. Luxembourg is one of only nine countries worldwide with a AAA rating. The country draws on its political, economic and regulatory stability to foster a strong culture of investor protection, which is an important element as well.”

Comprehensive suite of services

With more than 3,300 employees across 36 offices in 21 countries, Alter Domus is a leading provider of integrated solutions for the alternative investment industry globally, dedicated to serving private equity, real assets including real estate and infrastructure, and debt capital markets sectors. The firm has the ambition to deliver integrated and bespoke solutions at each level of the value chain, from investors down to asset level, spanning depositary, AIFM, central administration and corporate services.

Mondaini says the group has the expertise needed to provide financial professionals with a single point of entry and assist them in defining and setting up the most appropriate structure to fully achieve their objectives.

Real estate is a big growth area

Another significant growth area for Luxembourg’s financial industry is in real estate funds. The country’s international business environment has given rise to a number of structures designed to facilitate real estate acquisitions with cross-border components.

In a world of low interest rates, long-term investors such as insurers and pension funds are increasingly looking at alternative opportunities to secure higher yields.

“Real estate funds are an option that is better understood and more highly considered by those investors,” says Mondaini.

“If they must provide the returns that they need for their internal products, equity and fixed income don’t generate those returns anymore so they are diversifying their portfolio investments using alternatives. That pushes different segments including private equity and real estate funds,” he adds.

Many of these funds spread their portfolio across housing, logistics, infrastructure and office developments.

“Overall, the real estate sector is showing quite a resilient position,” Mondaini says.

Luxembourg’s cluster of experts in law, accountancy and other services are poised to benefit from the growth of real estate funds as many managers look to use the country as a services and distribution hub.

“Luxembourg is home to a wide range of service providers allowing fund promoters to get the best advice for their initiatives and choose the best fit to materialise their projects,” Mondaini comments.

He continues: “When you have your fund project clear in mind, within a short timeframe it’s easy to get into the market and get it designed and set up the right way to achieve your objectives.”

Robust supervision

Mondaini says that Luxembourg’s sophisticated regulatory framework and the well-established relationships between the supervisory authority and the financial sector also ensure the entire process of setting up a fund, while rigorous, is fast and straightforward.

“The regulator performs its duties of prudential supervision and supervision of the markets for the purpose of ensuring the safety and soundness of the financial sector, solely in the public interest,” he says.

“So, I think regulation is in a constant state of evolution, but it’s a healthy evolution in the sense that the regulator also understands the dynamic of changes necessary at national, European and international levels.”

He adds: “There is the right balance of exchange and communication between the associations representing the business and the regulators.”

Mondaini predicts that the regulatory framework will evolve, especially in the private debt market amid growing international scrutiny of the non-bank lending sector in particular.

“Developing alternative sources of financing to bank loans may be beneficial to the real economy but may also create new ‘shadow banking’ risks,” he says.

Either way, Mondaini feels confident that Luxembourg’s financial sector is in good health and stands to gain further from the steady growth of the alternative investment industry globally over the next few years.

Like this article? Sign up to our free newsletter Author Profile Related Topics Funds Legal & Regulation Services

Luxembourg is battling hard to stay at forefront of private equity industry Submitted 01/10/2021 - 12:18pm

By Robin Pagnamenta – It may be one of Europe’s smallest countries, but Luxembourg has never lacked for ambition.

Over the past half century, the Grand Duchy has steadily built on its strengths in private banking, investing, insurance and corporate lending to play an out-sized role in the continent’s financial sector.

These days, the Luxembourg Private Equity and Venture Capital Association (LPEA) estimates that 90 per cent of all European private equity and venture capital funds are domiciled in Luxembourg – a tribute to its reputation for political stability, niche expertise and regulatory competence, which in turn has helped transform it into one of the world’s wealthiest countries.

With more than EUR5.3 trillion in net assets under management in regulated funds, traditional Luxembourg-domiciled undertakings for collective investment have experienced robust growth during the past few years.

Emerging opportunities

The nation’s government and financial authorities have been keen to spot emerging new opportunities as they arise to further strengthen a sector which already employs over 50,000 people.

Of course, funds domiciled in Luxembourg pay lower taxes on their funds under management than in other EU nations – an advantage which helps investors to benefit from a bigger chunk of the payouts.

But that’s not the only advantage enjoyed by the private equity funds and asset managers who have flocked to the Grand Duchy, helping to cultivate a bustling industry of administration services, legal and audit firms as well as banks and asset management firms.

Luxembourg’s debt levels stand at just 22 per cent of GDP – one of the lowest ratios in the EU and roughly one third the level of Germany, according to Eurostat figures.

Stable environment

That cherished reputation for economic and regulatory stability has been another powerful factor in supporting the industry.

Yves Cheret of CSC, a fund administration specialist based in Luxembourg says there is a deep understanding of the need for stability at all levels.

“It’s not that there is no tax but the system itself is quite stable and robust, and the country itself is very stable with a triple-A rating,” he says.

“There are not a lot of countries which have had that triple-A rating for years and years and years,” Cheret says, adding that funds which domicile in Luxembourg usually do so with a time horizon of 10 years or longer.

That, he says, is simply because they are confident that the environment is unlikely to be very different over that timeframe.

He says: “If we change the system every three years, they will not like it, but they know that if they come in that system is not going to change dramatically within the next 10 years.”

Looking to the future

There have been other factors at play which have delivered a helping hand for Luxembourg.

Brexit has, of course, delivered a significant boost to the industry by triggering a boom in applications from London-based fund managers keen to establish Luxembourg funds aimed at European investors.

While that trend has slowed in recent months as financial market participants grow accustomed to the new realities of Europe post-Brexit, Luxembourg is already looking to the future.

The rise of private debt funds – fuelled in part by the new Basel Framework strictures on bank lending – as well as real estate funds and the growing popularity of funds with a focus on environmental and social governance (ESG), are all hot areas where Luxembourg is pushing hard to develop expertise and experience.

“If you look at the debt funds, they are developing quite fast because traditional lending that goes through banks is becoming more and more difficult,” says Marco Mondaini, Head of Depositary Services at Alter Domus in Luxembourg, referring to the rise of private debt funds and Luxembourg’s interest in the field.

“The cost that is linked to debt for traditional banks [is rising], mainly driven by regulation where you have to have a certain capital to lend. In a low interest rate environment that capital doesn’t produce any returns, so that’s why the banks are becoming more prudent.”

Luxembourg has astutely catered to the needs of the fund industry with a range of back office to front office services.

Legal and regulatory framework

Its multilingual and international workforce has helped to support alternative investment fund managers (AIFMs) and other third-party service providers.

But it is Luxembourg’s willingness to continually review its legal and regulatory framework to stay at the forefront of the fund management industry that has always set it apart.

Often, it has acted far more nimbly than other jurisdictions – an accomplishment made easier by its small size – handing it an important first mover advantage in creating attractive options for investors and asset managers.

For example, the creation of innovative structures, such as the SCSp (Special Limited Partnership) introduced in 2014, and the RAIF (Reserved Alternative Investment Fund) introduced in July 2016, have ensured Luxembourg has maintained its competitive edge.

The SCSp is a popular fund entity for alternative investments, including real estate. It is similar in flexibility to a traditional Anglo-Saxon limited partnership.

The RAIF, meanwhile, qualifies as alternative investment fund (AIF) and is not itself subject to CSSF product approval, ensuring a light touch regulatory approach.

Mondaini believes this innovative approach to the legal frameworks governing the fund management industry has been highly successful.

He says: “I think regulation is a constant evolution, but it’s a healthy evolution in the sense that the regulator also understands the dynamic of being pretty close to and pretty present in the market. It understands the constraints of the requirements. So I think today there is the right balance of exchange and communication between the associations representing the business, and the regulators.” 

Like this article? Sign up to our free newsletter Author Profile Related Topics Funds Legal & Regulation

BMA appoints new CEO and new Chairman Submitted 01/10/2021 - 12:07pm

The Bermuda Monetary Authority (Authority or BMA) has appointed Craig Swan and Donald Scott as Chief Executive Officer (CEO) and Chairman of the Board of Directors (Board), respectively.

Scott has held the position of Deputy Chair of the Authority’s Board since 2019. During this time, he has served on several Board committees, including the Corporate Governance and Ethics Committee, Human Capital Committee, Legislative and Policy Committee and Non-Executive Directors Committee. Prior to his appointment to the Board, Scott’s 30-year career was Bermuda-focused, working in Government in the technical areas of gross domestic product and national income compilation and also in the policy areas of economics, finance and health.

Scott says, “For nearly three years, I had the pleasure of serving as the Authority’s Deputy Chair, during which time I have had the benefit of working closely with Executive Chairman Mr. Jeremy Cox, as well as the other highly skilled and deeply experienced Directors on the BMA’s Board. I look forward to further fostering this collaboration with each of these Directors and the wider BMA team as we continue to fulfil our mandate as Bermuda’s independent regulator of all financial services.”

Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & Appointments

Transfer of ETF Express and Wealth Adviser Submitted 01/10/2021 - 12:00pm

Global Fund Media Ltd is pleased to announce the editorial buy out of ETF Express and Wealth Adviser.  As of 1 October 2021, Beverly Chandler and her team will be responsible for the continued evolution of the two titles.

The respected ETF Express ETF awards in the US and Europe will continue as a partnership between Global Fund Media and ETF Express. The US ETF awards have just enjoyed their third and largest outing, while next March will see the twelfth outing for the much-loved ETF Express European ETF awards.

Chandler says: “I am very excited at the opportunities that lie ahead for ETF Express and Wealth Adviser and very pleased to continue working with Global Fund Media on our very successful ETF awards in Europe and the US.”

For further information contact beverly.chandler@etfexpress.com

Like this article? Sign up to our free newsletter Author Profile Related Topics Deals & Transactions

Hedge funds circle UK blue-chip names, as FTSE takes a tumble Submitted 01/10/2021 - 10:35am

Sainsbury’s, Ocado and Hargreaves Lansdown remain among the most heavily shorted stocks on the UK FTSE 100 according to new market data from Ortex Analytics, as the UK’s blue-chip index started the fourth quarter with a slide.

Short interest stats for the past week show that some 6.52 per cent of Hargreaves Lansdown’s stock is out on loan. High profile hedge funds including AQR Capital Management, Marshall Wace and Pelham currently hold negative wagers on the UK financial services provider, according to regulatory disclosures made to the Financial Conduct Authority.

Hedge funds betting against London-listed names are also circling the UK grocery space, with some 5.41 per cent of Ocado’s stock and 4.81 per cent of Sainsbury’s also held by short sellers, though managers have reduced their positions in both in recent weeks. 
BT Group is the next most shorted name, at 4.69 per cent, according to London-based equity research and short interest data provider Ortex.

Elsewhere, 3.29 per cent of online food delivery service Just Eat’s stock is on loan. BHP Group, Rolls-Royce Holdings, British Land, and Kingfisher are also among those stocks with the largest percentage of free float shares held short, Ortex’s research shows.

The FTSE 100 was down around 1 per cent at one point on Friday, sliding around 45 points, as renewed concerns over inflation - coupled with the ongoing supply squeeze at petrol pumps and the end of the UK’s furlough scheme - put investors on the backfoot. 

Like this article? Sign up to our free newsletter Author Profile Hugh Leask Employee title Editor, Hedgeweek Twitter Linkedin Related Topics Funds Investments Investing in Hedge Funds Funds of Hedge Funds

Elliptic partners with Prime Trust to make business crypto transactions mainstream Submitted 01/10/2021 - 9:10am

Elliptic, a specialist in blockchain analytics and crypto compliance solutions, has agreed a customer agreement with US-based, financial infrastructure provider Prime Trust, which aims to help fintech innovators launch quickly and scale securely in today’s digital economy. 

The announcement comes at a critical time for Prime Trust as the business, which recently announced the close of a USD64 million Series A round, continues to add systems and personnel to expand the organisation’s B2B market share in crypto. Elliptic will play a key role in supporting Prime Trust as its cryptoasset compliance partner, helping the business to scale effectively and safely during a period of unprecedented growth and strong interest from both traditional financial institutions and digital asset innovators to expand crypto offerings. 

Amid the rise of crypto transactions among retail investors and businesses a growing need for risk management, compliance and analytics has emerged in order to facilitate legitimate digital asset transactions, prevent illegitimate use and operate with excellence under the financial industry’s stringent security standards. 

As part of the agreement, Elliptic will integrate several products from its suite to allow Prime Trust to perform the critical tasks of pre- and post-analysis checks to verify the legitimacy of cryptoasset transactions and funding. This includes its Navigator product to screen cryptoasset transactions for Anti-Money Laundering (AML) or sanctions risk, its Lens product to screen crypto wallet AML and sanctions risk screening, and its Forensics product, which facilitates investigations into cryptoasset wallet activity. 

“We continue to see an increased demand of crypto services from established financial institutions and a booming interest from retail investors in a digital world,” says Tom Brandl, Chief Security Officer at Prime Trust. “With the support of Elliptic, we’ve gone a step further to ensure that our customers can manage risk and scale securely with peace of mind so they can focus on the core of their business.” 

Tim Chapman, Vice President, Global Sales, of Elliptic, says: “The adoption of cryptoassets is in a stage of unprecedented growth and the ability to conduct transactions with cryptoassets safely and securely will only become more important in the coming years. Prime Trust is a highly innovative business at the forefront of cryptoasset integration with the traditional economy and we are thrilled to support them with the most robust analytics and compliance tools available as they go from strength to strength.”

Like this article? Sign up to our free newsletter Author Profile Related Topics Digital Assets

Luxembourg Report 2021

In a challenging time for all aspects of financial services, Luxembourg - Europe’s largest fund domicile - is determined to leverage all emerging opportunities and mitigate any accompanying risks. 

This report explores Luxembourg’s ongoing appeal for fund managers and services providers, the growth of private debt and real estate funds, the importance of Luxembourg’s reputation for stability and supervision, and the need to recruit and train the right talent.

Fund launches outweigh closures in Q2 as industry maintains momentum Submitted 30/09/2021 - 2:20pm

New hedge fund launches continue to outnumber closures this year, new industry data shows.

The number of new hedge funds launched in the second quarter of 2021 totalled 180, a slight dip from the estimated 189 launches during the previous three-month period, according to Hedge Fund Research data

However, Q2 saw the number of estimated launches outweigh the number of liquidations for the fourth consecutive quarter, following eight consecutive quarters of contraction.

Overall, some 695 new funds have been launched over the course of the previous four quarters - a total which tops calendar year totals for the past three years dating back to 2017, when 735 funds launched, HFR noted.

The mid-2021 stats suggest the industry is maintaining its strong early-year momentum, which saw more hedge funds launched in Q1 than at any other quarter since the end of 2017. 

Meanwhile, hedge funds generated gains of almost 10 per cent in the eight-month period to the end of August, helping to drive total industry assets under management towards a record USD4 trillion.

On the flipside, the number of hedge fund closures dropped to 149 in Q2 this year, the lowest total since 137 funds closed in Q3 last year. Q2’s number is a 50 per cent drop from the 304 liquidations recorded in Q1 2020. 

Liquidations in the trailing four quarters totaled 596, falling below the respective totals of the past 13 calendar years dating back to 2007 when 563 funds were shuttered.

“Trends of strong launches and historically low liquidations accelerated through mid-year, with total industry capital poised to surpass a historic milestone, while the HFRI extended strong H1 gains as investors positioned for higher US interest rates driven by inflation and funding new stimulus measures,” said HFR president Kenneth Heinz.

Heinz noted uncorrelated macro and interest rate-sensitive relative value arbitrage strategies saw strong launch trends, as managers and investors position for higher interest rates and rising inflationary pressures.

Elsewhere, hedge fund management fees fell one basis point to 1.36 per cent between Q1 and Q2, while the average incentive fee declined 3 basis points to end the second quarter at 16.17 per cent. 

For new funds launched in Q2, the estimated average management fee rose to 1.51 per cent, slightly above the industry-wide average of 1.36 per cent, as well as the 1.40 per cent average management fee for funds launched in Q1. 

The average incentive fee for funds launched in Q2 was an estimated 17.0 per cent, slightly below the average incentive fee of 17.1 per cent for funds launched in Q1, and the average incentive fee of 17.25 per cent for funds launched overall in 2020.

Like this article? Sign up to our free newsletter Author Profile Hugh Leask Employee title Editor, Hedgeweek Twitter Linkedin Related Topics Funds Investments Investing in Hedge Funds

Bloomberg launches BQuant Enterprise Submitted 30/09/2021 - 1:53pm

Bloomberg has launched BQuant Enterprise, a public/private-cloud-based analytics platform (the BQuant Enterprise Platform) for quantitative analysts and data scientists in financial markets. 

This customisable, turnkey solution accelerates financial services firms’ ability to compete more aggressively by incorporating quantitative approaches to all aspects of their investment processes. In addition, BQuant is the first data science solution from Bloomberg that is designed specifically for financial markets and offers operation-ready access to Bloomberg’s comprehensive range of high-quality, market leading, multi-asset-class financial and alternative data sets.
 
“The largest global financial firms have fully embraced quantitative investing to improve trading strategies, while reducing expenses. However, the high cost of entry has put the majority of firms at a disadvantage. BQuant Enterprise levels the playing field with a high-performance platform that can operate as your core platform or can be integrated in days with firms’ existing data science research environments,” says Tony McManus, Global Head of Enterprise Data at Bloomberg.
 
The financial industry’s leading firms have invested heavily in building systems to support quantitative analysts, who use mathematical models, voluminous data sets, and computational power to evaluate investment strategies and generate new ideas. With BQuant Enterprise, front-office teams can quickly reap the benefits of these sophisticated data science capabilities, while IT departments can maximize their technology investments by integrating the solution with their existing infrastructures, databases and workflows.
 
BQuant Enterprise offers analysts more efficient workflows for creating, validating, and putting their models in production for decision making. The platform comprises finance-specific tools, services, and libraries to support a broad range of quantitative analytics, including factor model evaluation, backtesting strategies, and analysing portfolios, across asset classes. Features include:

Ready-to-Use Data Sets: Access to Bloomberg’s comprehensive range of high-quality, market leading, multi-asset-class financial and alternative linked data sets, in addition to capabilities for using their own internal data

Python-Based Environment: An interactive platform rooted in Python and Jupyter notebooks — the industry-preferred choice among quantitative analysts and data scientists focused on financial markets — that uses Python’s open-source scientific computing ecosystem and empowers advanced users to build their own applications.

Quantitative Workflows: API-first analytics and innovative, domain-specific tools that work together to provide fully customisable, end-to-end workflows, from initial data exploration to backtesting, optimisation and visualisation.

Research Distribution: Effortless sharing of analysis results across the organisation — from quantitative analysts to portfolio managers and other consumers — with capabilities to have the data automatically refresh within the applications.

Enterprise Administration Capabilities and Security: Allows firm administrators to manage environments, code repositories, users and roles.

Cloud-Ready: Compatible with the most popular public clouds, as well as on-premises private and hybrid cloud environments.

Support: Backed by Bloomberg’s exemplary customer support, which helps firms customise their BQuant Enterprise installation.
 
“Thornburg was early to recognsze the advantages that programmatic workflows could bring to portfolio construction,” says Igor R Kuznetsov, PhD, Portfolio Analytics Manager at Thornburg Investment Management, a USD49 billion independent global investment management firm that provides a range of active investment strategies. “We built a web application to fill this need, but the data was static, and the app could not ingest our highly valued Bloomberg data sources. After selecting BQuant Enterprise, we were able to bypass those limitations. My team could immediately access a wide range of normalized data; spend less time manipulating it; apply additional backtesting capabilities; and generate more ideas faster than before.”
 
BQuant Enterprise lowers the total cost of ownership for firms to implement a platform for quantitative analytics. Its design offers system interoperability, data portability, and support for open standards, thereby enabling quick and easy integration with customers’ existing infrastructures, databases, and workflows. In addition, the BQuant Enterprise Platform gives IT teams a high level of visibility into user activities so they can add oversight to any BQuant processes that become mission-critical to the firm. Bloomberg’s support team helps IT departments and financial analysts adapt BQuant Enterprise to their unique infrastructure and capability needs, resulting in a fast time to market, a high return on investment, and unprecedented scalability. And firms can rely on Bloomberg’s renowned customer service for on-going support and maintenance.
 
“In building BQuant Enterprise, our goal was to develop an open architecture based on a powerful tech stack that is readily accessible and infinitely extensible, so it can grow as our customers grow,” says Shawn Edwards, Bloomberg’s Chief Technology Officer. “Utilising the power of the cloud, we’re giving clients a turnkey environment where they can connect to their existing systems, bring their own data, mix it with Bloomberg’s comprehensive data sets, and enhance the collaboration of their investment professionals as they test and deploy new quantitative investment strategies.”

Like this article? Sign up to our free newsletter Author Profile Related Topics Services Research & Analytics

Prometheus alts raises USD5m in seed funding Submitted 30/09/2021 - 11:39am

Prometheus Alternative Investments has raised USD5 million in an oversubscribed seed round.

The round was led by 8VC/Joe Lonsdale with participation from a diverse set of prominent investors including Kyle Bass (Hayman Capital), Gaingels, John Quinn (Quinn Emanuel), Gil Weisblum (family office of Barry Diller), Jared Rothman (family office of Dennis Washington), Thane Ritchie, Curtis Macnguyen (Inflection Capital & Ivory Capital), Kim Kolt (For Good Ventures), Alok Agrawal (Bloom Tree Capital), Chris Blum (Global Head of Equities at JP Morgan Wealth Management) and Khalid Malik (Meridiem Capital).

Founded by former star hedge fund manager Michael Wang, Prometheus brings together a social network with a marketplace, connecting investors with hedge funds, crypto funds, venture capital, private equity, commodities, and the experts behind those funds.

Wang says: “As we grow this community and I talk to more and more investors and colleagues, I’ve come to realise that Prometheus isn’t just about democratising access to alternative funds, it’s about changing the way we talk finance, the way we share ideas, the way we invest together in bettering our world, not simply growing wealth. We first chose the name Prometheus to depict sharing the fires of Wall Street with Main Street investors. Now we see we’re lighting up a whole new way of thinking about investing.”

Like this article? Sign up to our free newsletter Author Profile Related Topics Deals & Transactions Finance & Insurance Investments VC

Activist hedge fund TCI blasts “selective” disclosures at Canadian National Railway Submitted 30/09/2021 - 10:26am

TCI Fund Management, Sir Christopher Hohn’s activist hedge fund, says there is a “a deliberate lack of transparency” and “a selective approach to disclosure with respect to governance matters” at Canadian National Railway.

TCI this week wrote to Canadian National Railway’s board of directors to voice what it calls “serious concerns” about the Montreal-headquartered firm’s integrity and commitment to proper corporate governance practices.

The letter centres around the recent resignation of Julie Godin, CN’s youngest female director, from the company’s board on September 16. 

TCI - which has been a CN shareholder since 2018, and recently increased its holdings to more than 5 per cent of shares outstanding, valued at USD4 billion - alleges the freight railway company failed to disclose this material development in an “appropriate and timely manner.”

Established in 2003 by Sir Christopher Hohn, the London-based activist hedge fund has a value-oriented, fundamental, private equity-like investment style, and is known for its fearsome and often-combative approach to boardroom battles.

This week’s letter maintains Godin’s resignation took place the same day TCI formally requisitioned a special meeting to replace four board directors, and the day before CN announced its new strategic plan.

Among other things, CN’s board failed to immediately issue a press release publicly announcing Godin’s resignation as required, TCI said, adding this was a “departure from CN’s prior practice” regarding communicating changes to the board or senior management.

“The manner in which Julie Godin’s resignation was dealt with, including the failure to inform the market by way of press release in a timely manner, especially in the existing context, raises serious questions about the integrity of the board and its commitment to good corporate governance,” the letter, dated September 29, read.

“This conduct is another example in a long list of corporate governance failures at CN and illustrates why urgent change to the board and leadership is necessary to put CN back on track. 

“TCI has serious concerns about this failure to disclose and intends to report Canadian National to the relevant Canadian securities regulators and stock exchanges today.”

The latest salvo follows recent TCI criticisms of CN’s USD30 billion swoop for Kansas City Southern, the US, Mexico, and Panama-focused railroad operator. 

Earlier this month Hohn called on CN to halt the bid, requesting a special meeting of CN shareholders aimed at overhauling the board and replacing its CEO.

“We believe CN’s best days are ahead of it, provided the company immediately withdraws from its reckless, irresponsible, and value destructive pursuit of KCS,” Hohn wrote.

Like this article? Sign up to our free newsletter Author Profile Hugh Leask Employee title Editor, Hedgeweek Twitter Linkedin Related Topics Business & Services Restructuring Companies Compliance

Novus launches new illiquid portfolio capabilities for asset allocators and managers Submitted 30/09/2021 - 9:26am

Novus Partners, a portfolio intelligence company servicing both asset capital allocators and hedge fund managers, has made significant updates to its platform as it relates to the ingestion and analysis of ‘deep’ portfolio data.

“As we continue to build on our long-term vision to become the ‘one’ platform for institutional investors, over the last 12 months we have made a series of updates to the Novus Platform that expand our portfolio intelligence capabilities; these updates enable our clients to better manage their portfolios through deeper intelligence, collaborative updates, and personalised dashboards,” says Andrea Gentilini, CEO of Novus.

These enhancements include a cash flow projection capability through the Novus “What-If Illiquids” tool, which provides institutional investors with a vital hypothetical analysis instrument to help plan future investments in private assets. The tool lets clients dynamically configure and model how cash flows and portfolio exposures are projected across all funds within a client’s portfolio. As a result of this analysis, investors can forecast their expected future exposures by sector, market cap, and geography.

These enhancements complement Novus’ existing liquidity analysis tool, which allows investors to model redemption terms associated with their ‘liquid’ funds. The two functionalities combined allow investors to properly model cash flow needs, and be on top of funding requirements for their entire portfolio.

These developments also allow for crucial portfolio stress testing. “Consider exogenous market events such as Covid-19, which created a shock in most investors’ portfolios. This liquidity analysis tool enables investors to determine how many days are required to redeem from each portfolio position in order – for example – to fund private market commitments. It also allows managers to comply with new ESMA regulations,” Gentilini adds.

Novus has seen notable growth in client acquisition and retention rates during the year-on-year period while it has continued to develop flexible high-quality data management and analysis tools, especially in illiquid investments. As part of its expanded product offerings for illiquid and private equity investments, Novus has also continued to build out its “Private Equity Suite,” which aligns with overall institutional demand for private markets that grew to USD7.4 trillion in 2020, with PE accounting for the largest growth of all private asset classes, according to McKinsey.

Consistent with its historical DNA of providing deep, position-level transparency for investors in liquid funds, Novus now provides position-level transparency in private assets. Whether you are investing in a portfolio of real estate, ventures, wine, art, horses, crypto-currencies or non-financial-tokens, Novus provides tools to ingest and represent position-level information alongside other traditional portions of an investor’s portfolio.

“All investors we work with want ‘one’ platform to represent and analyse all of their portfolio data. With the latest enhancements made in private assets, Novus has become just that. Compared to the competition, Novus excels at providing deep transparency on portfolio holdings. With mounting fiduciary obligations for institutional investors to be on top of and in control of their data these tools enable investors to comprehensively meet that need,” Gentilini says.

Like this article? Sign up to our free newsletter Author Profile Related Topics Services Research & Analytics

North Rock Capital personalises digital office with Glue42 Submitted 30/09/2021 - 9:25am

North Rock Capital, an investment management firm built upon a global multi-manager investment platform, has selected Glue42, the company that delivers integrated desktop experiences to financial institutions globally, to serve as the foundation to its next-generation trading and risk platform. 

Against a backdrop of an ever-changing regulatory environment and an expected expansion, North Rock Capital is investing heavily in proprietary technology, infrastructure, and risk analytics. The latest version of Glue42 Enterprise provided the firm the enterprise desktop integration solution it needed to offer its portfolio managers a best-in-class workspace and personalised user experiences.  
 
Kelly Perkins, Chief Investment Officer, North Rock Capital, says: “Since we launched the North Rock platform in 2013, we’ve grown significantly and now partner with nearly 50 portfolio manager teams, each focused on a particular sector, region or industry. Attracting top-tier specialised portfolio manager talent is critical to North Rock Capital’s continued growth and ability to deliver results to our investors. By providing portfolio managers with the tools to unify their individual desktops, we can build a flexible and personalised trading and portfolio management platform to deal with market volatility and growth without downtime. 
 
“As we grow our portfolio, so does our need for integration of systems and processes. Glue42 enables us to integrate our proprietary applications and algorithms with newly acquired web applications without the need to discard existing technology investments. As such they will serve as the foundation to our technical blueprint and drive its success.”  
 
North Rock Capital is not alone in making significant technical investments. In fact, according to a Greenwich Coalition study of June this year, the average buy-side trading desk allocated 41 per cent of its overall budget to technology.  
 
According to a recent article by the head of research and communications of AIMA, the hedge fund industry has been using technology more in the last 12 months, a usage that is expected to double over the rest of the year. 
 
Glue42 allows developers at North Rock Capital to deploy business solutions faster, delivering a better quality of services and speeding up ongoing delivery efforts. 
 
“The focus on desktop transformation is here to stay,” says James Wooster, COO, Glue42. “In order to offer the best experience for portfolio managers, the hedge fund industry is turning to more comprehensive solutions and process automation. By digitising the firm’s institutional knowledge and experience, its portfolio managers will have a holistic view of multiple data sources which will drive better outcomes and provide a significant competitive advantage.” 
 
North Rock Capital adds to Glue42’s client portfolio and helps them continue to innovate. As each firm continues to drive standards and innovate for their customers, Glue42 and North Rock Capital expect a long-term partnership.  

Like this article? Sign up to our free newsletter Author Profile Related Topics Trading & Execution Technology & software solutions

How Apeira Capital is fusing venture capital with hedge fund investing Submitted 29/09/2021 - 4:42pm

Established by founder and managing partner Natalie Hwang (pictured), New York-based Apeira Capital Advisors is a creative venture capital asset manager which uses long/short hedge fund investing techniques to invest in a broad range of private technology companies.

Prior to unveiling the firm in spring 2020, Hwang had been founder and managing director of Simon Ventures, the venture capital unit of Simon Property Group, where she built and managed a global consumers-focused technology fund.  Her experience also encompasses hedge fund seeding at The Blackstone Group.

Apeira focuses primarily on early growth companies that have reached an inflective point of scale, typically at the series A through C stages of the funding process. Though it invests predominantly on a long-only basis, through traditional and synthetic equity structures to capture positive value, Apeira also looks to opportunistically short private company valuations it sees as being vulnerable to near-term correction to capture negative value, Hwang explains.

“When I look back and connect the dots of my most recent prior experiences which span public to private, then a long/short equity venture capital fund makes all the sense in the world to me,” Hwang says of Apeira’s origins.

Noting the current failure rates for start-up companies, which are estimated to run at more than 90 per cent plus, Hwang says this sector is by its nature a “risky asset class”, which makes venture businesses “mostly strike-outs, and very few home runs.”

This, she adds, helps form the basis of Apeira’s investing style. “What we’re ultimately able to do with our strategy is to create limited duration and controlled exposures to specific stocks, or baskets of stocks,” she observes. “For the first time within private markets, you’re able to not only capture positive value, but you’re also able to capture, and profit off, of negative value, which we are able to achieve by manufacturing through synthetic liquidity moments that replicate the P&L impact that results from the purchase and sale of stock under very deliberately timed conditions.”

How would you describe Apeira’s investment approach?

NH: “The biggest point to stress about venture is that there’s always a lot of value that’s accumulating within this market, whether positive or negative, given that gains and losses occur at an extraordinary scale.

“But unlike liquid public markets, the vast majority of this value remains largely inaccessible to investors for two reasons. One, they can only invest in one direction and, two, it’s challenging to get in and out of deals within the right window of this position.

“Due to thin volumes, high fees, and wide buy and sell spreads, secondary markets provide for very limited recourse and often force investors into this binary decision framework of having to sell at deep discounts or having to manage through post-IPO volatility risk and significant value erosion.

“This challenge highlights the importance of the venture economy as a store of value, and also the relative lack of financial sophistication of this capital market in capturing that value which has contributed to challenges in performance capture.”

“Our value proposition is that we fundamentally believe in a world of better odds where, despite high failure rates, we can manage every investment to a successful outcome because we can generate returns from both private company gains and losses to decorrelate the odds of venture capital success.”

How does Apeira differ from other venture capital-focused strategies?

NH: “Unlike other venture funds, our focus on capturing both positive and negative value allows us to invest on a multi-directional basis. We can go long, we can short, we can hedge, or even run positions on a delta-neutral basis to manage both bullish and bearish bets to generate returns across a broad range of valuation scenarios.

“To do that, we leverage derivative technology to bring our own bespoke, private company-based derivative instruments to venture, which we call private synthetics.

“The strategy is intended to offer good downside protection, but also intended to deliver high alpha on relatively low beta in relation to the rest of the industry.

“We aim to generate returns from both private start-up companies’ gains and losses to offer highly attractive and differentiated fund economics that ultimately entail enhanced venture upside and reduced risk.”

Where do you look to deploy capital?

NH: “We exclusively focus on private technology companies. We have extensive sector expertise within the world of consumer technology, but we span the gamut from tech-enabled to deep-tech, depending on the category. These are companies that are not publicly traded – they are usually fairly illiquid companies which leverage technology as their primary differentiator for scaling.

“We may also look at tech-enabled companies where their primary differentiator may not necessarily be tech, but some other area of capability.  However, the ability for these companies to leverage tech to create operating or scale efficiencies will always be a dominant criterion that we look for.”

The lines between hedge funds and private equity strategies have become increasingly blurred in recent years. How does Apeira’s offering fit within this evolving landscape?

NH: “We’re firmly a venture capital fund given the types of companies that we invest in. We have deep domain expertise within the world of technology. But we differ from other venture capital funds in that we invest on a multi-directional basis similar to hedge funds.

“I think the traditional venture model in its current form has proven quite limited in terms of its ability to manage against overvalued or otherwise inefficiently-priced market environments. We believe there’s value to leveraging well-worn public market strategies for innovative use in cases across private markets, which has lacked innovation for quite some time.”

How do you build your investment ideas?

NH: “We invest in two separate frameworks. There’s a framework for investing on a long-only basis and one for tactical investing. When we invest long-term, we care about the underlying fundamental attractiveness of the companies that we’re targeting.  Opportunistically, we may also look to arbitrage value dislocations in the market that are largely momentum-driven and become disconnected from the underlying fundamentals of the company, which is why you can often see such significant gaps in pricing between companies in terms of book to realisable cash values.”

To what extent does the macro perspective shape your investment process?

NH: “Our approach combines top-down views with bottom-up company analysis. We’re constantly monitoring and analysing the market as well as shifts in company performance to protect the portfolio and single positions from both external as well as internal shocks.

“It’s also important for us to be able to understand what the extent of dislocation is between the public versus the private market. Oftentimes when you see multiple compression occurring in the public markets, that particular pricing trend may not be felt within the private markets for an extended period of time. There’s often a lag effect in terms of the trickle-down effect. So we’re constantly monitoring the macro markets because that provides us with a sense for the exit constraints that we have to keep in mind when we’re thinking about what makes sense in terms of capitalisation strategy for the long book as well as the tactical ops book.

“We also look to the macro markets to determine what the appropriate exposures are for purposes of managing the portfolio, which are not just driven by the supply of ideas and conviction levels – they are also driven by the extent of perceived correlations in the private market.

“As with hedge funds, our strategy involves capturing a spread in pricing.”

What were some of the challenges and opportunities in launching a new fund during the pandemic?

NH: “I think we’re launching our strategy at quite a timely point in the market cycle. If you look at the extent of optimism that investors have around technology, there’s significant appetite.

“People are deploying more capital than they ever have before in the search for alpha, but I think venture as an asset class is characterised by extreme volatility which creates a very strong environment for investing on a long/short basis.

“There’s a tremendous need for strategies that protect against that sort of volatility, and to generate durable returns irrespective of what the market conditions present. It's an exciting time to be introducing this strategy to the market.”

Like this article? Sign up to our free newsletter Author Profile Hugh Leask Employee title Editor, Hedgeweek Twitter Linkedin Related Topics Investments

Angelo Gordon appoints Chief Strategy Officer Submitted 29/09/2021 - 2:28pm

Angelo Gordon, a USD44 billion alternative investment firm focused on credit and real estate investing, has appointed Scott Soussa, Senior Managing Director at Blackstone and formerly co-Head of BAAM’s Strategic Capital Group, as Chief Strategy Officer, effective April 2022. 

In this new role, Soussa will report to Josh Baumgarten and Adam Schwartz, Angelo Gordon’s co-Chief Executive Officers.
 
Baumgarten, co-CEO and Head of Credit at Angelo Gordon stated: “We are thrilled to have someone of Scott’s calibre join Angelo Gordon. Scott brings unparalleled insights and perspectives into the alternative investment management sector and we look forward to his contributions as we continue to execute on our strategic priorities.”
 
Adam Schwartz, co-CEO and Head of Real Estate at Angelo Gordon, adds: “Scott’s experience across a range of strategies and geographies and his depth of knowledge of industry best practices will be invaluable as we continue to chart our course for continued success on behalf of our clients. We could not be more excited to welcome Scott to Angelo Gordon and look forward to introducing him to our limited partners in due course.”
 
Soussa is the first senior appointment by Baumgarten and Schwartz since they assumed the co-CEO roles on 1 January, 2021, as part of a leadership transition that saw co-Founder Michael Gordon step back from the day-to-day management of the firm.
 
Soussa has spent the past two decades at Blackstone. Most recently, he played an integral role in building Blackstone’s successful GP stakes business and identifying and working with world-class alternative investment managers globally. He has also led the firm’s hedge fund seeding business since 2016.
 
Prior to joining Blackstone in 2003, Soussa was Controller of Lava Trading Inc, a securities trading technology company.
 
Soussa received a BS in Accounting from Binghamton University, where he graduated summa cum laude and was elected to Beta Gamma Sigma. He is the Co-Founder and Chairman of the Board of Michael’s Mission, a charity focused on improving the quality of life and treatment options for colorectal cancer patients, families, and caregivers. He is a Certified Public Accountant.

Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & Appointments

BTIG Franchise Sales adds Senior Digital Asset Strategy and Sales Specialist Submitted 29/09/2021 - 2:20pm

BTIG has appointed Michael Kaye as a Managing Director and Digital Asset Strategy and Sales Specialist in the firm’s Franchise Sales division. 

Kaye will leverage his network of industry relationships to provide comprehensive views of the digital asset sector for BTIG’s institutional and corporate clients across a broad array of subsectors including blockchain technology, cryptocurrency solutions, digital payments and financial services. Kaye will be based in the firm’s New York office and report to Dan Wychulis, Managing Director and Head of BTIG US Strategy and Franchise Sales.

As the most recent addition to an expanding BTIG Digital Asset team, Kaye enhances the focus and effort to further build the BTIG brand anchored by Mark Palmer, BTIG FinTech and Digital Assets Analyst, and the Research team. Prior to BTIG, he was the Head Trader at Coltrane Asset Management, specialising in digital assets, equity capital markets and the consumer sector. Previously, Kaye was a Director within Equity Sales at Berenberg Capital Markets and Redburn. Earlier in his career, he spent five years at Balyasny in London and Chicago as a Portfolio Manager and Trader. He was also actively involved in the firm’s equity capital markets activities. Mr. Kaye held similar Portfolio Manager roles at Bellman Walter Capital, Walter Capital, SAC Global Capital and Deutsche Bank.

“We are thrilled to have Michael join the firm,” says Wychulis. “His vast expertise and deep understanding of the digital asset landscape will be enormously valuable to both our corporate and institutional investor clients. Building off the recent momentum created by our widely attended digital asset conference, Michael gives BTIG yet another resource to offer our clients as they look for guidance in the digital asset sector.”

Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & Appointments

Hedge funds “need to get going” on IFPR overhaul as January deadline looms Submitted 29/09/2021 - 11:49am

Hedge funds and other alternative asset managers have just three months left to prepare for the Investment Firms Prudential Regime, the far-reaching new regulatory framework which potentially heralds “complex and multi-faceted” compliance processes for firms.

The Financial Conduct Authority’s new IFPR, set to take effect from January 2022, heralds sweeping changes to rules covering capital, liquidity, remuneration, reporting, and disclosures, among other things.

As part of the overhaul, the existing Internal Capital Adequacy Assessment Process (ICAAP) framework – which stems from EU legislation covering banks and other financial institutions’ capital adequacy, in force since 2006 – is being replaced by the Internal Capital and Risk Assessment (ICARA), a new way of measuring institutions’ capital adequacy.

FCA-authorised investment managers, advisors and brokers who provide MiFID services are affected by IFPR, and the shake-up will see a whole spectrum of investment firms - including hedge funds - now subject to their own dedicated prudential regime under the IFPR, which includes the ICARA. 

Under the existing ICAAP regime, regulatory capital requirements are calibrated and calculated around various potential risks facing firms, and how they can address those risks. These include credit risks, market risks, operational risks and business risks, such as cyberattacks or large client redemptions. In contrast, the incoming ICARA framework focuses on harms posed not only to the firm itself but also externally. These may include, for instance, the impact of poor investment performance on the firm itself, its clients, and the wider financial services industry.

Matt Raver, managing director at compliance consultancy firm RQC Group, said over 90 per cent of his firm’s hedge fund clients are likely to be impacted by the ICARA, adding that establishing the new framework is likely to be “a particularly complex and multi-faceted task.”

“If you are a hedge fund and you’re subject to ICAAP now, you’re probably going to be doing an ICARA going forward,” Raver told Hedgeweek.

Building on this point, he noted that while the ICAAP takes account of regulatory capital, ICARA scrutinises both regulatory capital as well as liquidity – and firms will require more comprehensive wind-down plans going forward, which not every hedge fund manager may currently have.

These include detailed practical steps, such as a timetable of any wind-down process, how money may be returned to investors, and how the wind-down will be communicated to employees, prime brokers, fund administrators and other stakeholders.

Another major change centres around regulatory capital. Raver highlights the introduction of K-factors, which form part of the new regulatory capital calculations, and which will now be required of asset managers meeting certain thresholds including GBP1.2 billion or more in AUM or total gross revenues from investment activity of GBP30 million or more. Some of these thresholds might need to be considered on a group basis. 

“Where the firm is acting as an AIFM of record to the AIF, it does not need to factor this into the K-factors, because this is dealt with under the existing regulatory capital regime for that activity.

“However, there are a number of K-factors depending on other activities you’re conducting. If you’re a hedge fund manager, you’re likely to fall into one called K-AUM, where you take two basis points of your funds under management.

“It doesn’t apply to the smaller firms, which are called ‘small and non-interconnected firms’. And so if a hedge fund does not meet the thresholds, it will likely to not need to worry about K-factors,” Raver said. “But larger firms will be subject to this.”

Elsewhere, the new regime calls for increased notifications to the FCA should a firm’s regulatory capital or liquid assets requirements diminish to certain levels that may impact markets more widely. It sets out certain trigger events that require investment managers and other firms to notify the FCA.

“Among our client base, there are firms which are extremely well-capitalised and are in absolutely no danger of breaching the regulatory capital requirements. But there are other firms which often hover around the limits. These firms may find that they will need to activate their recovery plans to rectify the situation, including asking the owners to increase capital, or alternatively instigate the firm’s wind-down plan,” Raver said.

“I think some firms are going to struggle if, every month or every few months, they are having to tell the FCA that they are within 110 per cent of their regulatory capital requirement, which is one of the trigger events.”

With just three months to go until the new rules take effect, anecdotal evidence indicates some hedge fund firms have been more proactive than others in preparing for what looks set to be an onerous implementation process.

To address the potential hurdles ahead of the 1 January 2022 deadline the Alternative Investment Management Association, the global hedge fund industry trade body, this month published an IFPR implementation guide, and is supporting members by facilitating peer-to-peer workshops during the fourth quarter.

Jennifer Wood, managing director and global head of asset management regulation and sound practices at AIMA, said the timeline for IFPR implementation will be challenging for firms.

“Firms that have previously had to perform the ICAAP process will have a leg-up on the firms that have not had to do this before, although the ICAAP and ICARA processes do differ a bit. The K-factors will be new for everyone and will be more challenging for firms with more complex business models and even more so for firms that deal on their own account or underwrite on a firm commitment basis,” Wood explained.

“At the end of the implementation process, some firms will find themselves having to set aside significantly more capital and own funds than was previously the case.”
 
Raver meanwhile underlined how the ICARA is not simply a ‘direct replacement’ for the ICAAP. 

“It’s not as conceptually similar as a lot of people think it is - this is something we’ve been speaking to firms about for some time now,” he observed. “I would reiterate that while the ICARA is in some ways similar to an ICAAP, you’re still going to have to do a brand-new exercise and brand-new analysis on this.”

He added: “If you look at IFPR holistically – because it’s not just the ICARA, there are various other elements – I would say if a firm hasn’t started its preparation then it really needs to get going, otherwise it’s going to run out of time and realise there are a lot of moving parts. You can replicate certain elements from the current prudential frameworks, but there are additional elements that need tackling.”

Like this article? Sign up to our free newsletter Author Profile Hugh Leask Employee title Editor, Hedgeweek Twitter Linkedin Related Topics Funds Investments Investing in Hedge Funds

Ultimus LeverPoint makes Senior Operations appointment Submitted 29/09/2021 - 9:56am

Ultimus LeverPoint Private Fund Solutions, a leading private fund administrator, has appointed Todd Werner as Senior Vice President, Private Fund Operations. 

Werner will play a central role in working with the client services teams on deliverables and will also help to continue evolving the firm’s operating model through the use of technology. Werner’s 25-year career includes a strong emphasis on developing and enhancing operations to meet client and business challenges for major asset management firms covering alternative investments, including hedge funds, private equity funds and venture capital funds.

In this new position at Ultimus LeverPoint, Werner will lead the firm in leveraging state-of-the-art technology to automate and streamline processes and systems that enhance the client experience, particularly in areas that include reporting, access to data, and communications. He will focus on continuing to build the firm’s operational efficiencies and to enhance the firm’s quality control processes, toward the goal of delivering the best possible service and solutions for alternative fund management clients. 

Evan Audette, EVP, COO, Ultimus Leverpoint, says that Werner brings not only depth of experience in operations but also a unique perspective on balancing technology and people. “Todd’s ability to leverage technology in operations is well known in the industry,” he says. “Along with that, he’s also built a reputation for his ‘people first’ philosophy—and for keeping a strong focus on the people behind the processes and making sure clients make the connection too. He has built and led outstanding teams, and we are extremely happy to have him on ours.”

Werner joins Ultimus LeverPoint as the firm continues to scale up and work with clients of all sizes and complexities. His experience reinforces the firm’s institutional strength and its commitment to create ideal team structures for meeting specific client needs and challenges. 

Ultimus CEO Gary Tenkman says that Werner’s experience and approach reflect Ultimus’ client-centric mission, as well as the firm’s ongoing commitment to technology and talent. “I have known Todd for almost 20 years,” he states, “and have been impressed with his approach to harnessing the power of both technology and people to enhance the client experience. We continue to invest in state-of-the-art technology and in the industry’s top talent, and adding Todd to the Ultimus team is a direct reflection of our commitment to both.”

Prior to joining Ultimus LeverPoint, Werner was director of SS&C Technologies private equity services for more than 6 years. Prior to that, Werner spent more than 10 years at CitiBank, NA, where he held successive director-level positions within its private equity services and hedge fund services. His early experience included time with Bank of New York and SEI Investments, and he holds an MBA from Fordham University in New York City.

Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & Appointments

CAIS expands independent broker dealer relationships with alts education Submitted 29/09/2021 - 9:54am

Alternative investment platform CAIS has announced that CAIS IQ is supporting independent broker dealers and home offices through its membership and sponsorship of two leading trade associations: the Alternative and Direct Investment Securities Association (ADISA) and Institute for Portfolio Advisors (IPA). 

These sponsorships represent CAIS’s commitment to empowering financial advisors with the education they need to allocate to alternative investments.

“We are happy to have CAIS join ADISA as a new member and sponsor as they work to broaden their relationships throughout the broker-dealer community,” says John Harrison, DBA, Executive Director of ADISA. “ADISA prides itself on broadening access to quality alternative investments by facilitating education, relationships and advocacy. As such, we welcome CAIS to our large coalition and look forward to working with them in the coming years.”

The CAIS IQ platform provides independent broker dealer firms with personalised learning and development opportunities on topics ranging from the science of client motivation to courses on strategies, such as private equity, hedge funds and digital assets. In addition, many broker dealer firms have independently elected to use the CAIS IQ platform to meet certain regulatory requirements related to education of their registered representatives. “CAIS IQ provides home offices with the control, oversight, and permissions they need in order to learn about and allocate to alternative investments,” says Andrew Smith Lewis, Chief Innovation Officer at CAIS.

The platform uses artificial intelligence and machine learning to scale proven cognitive science and empower financial advisors to learn faster and remember longer. For each individual advisor, the platform measures the rate of information absorption and knowledge decay, simultaneously calculating the precise moment to review to achieve maximum retention. Users have seen up to 50 per cent reduction in time spent learning through the platform compared to traditional methods of learning.

Most recently, the CAIS IQ Center, a dedicated, interactive community, was launched for the SALT NY conference. The CAIS IQ Center featured a live stream of content from the alternative investment track, relevant videos, articles and CAIS IQ learning courses. The CAIS IQ Center acted as the virtual passport to exclusive interviews with industry leaders, topical investment themes, and curated modules on all things alternatives.

“The IPA has long supported the advancement of fintech solutions and alternative investment education that empower wealth managers to drive better outcomes for main street investors,” says Tony Chereso, President/CEO of the Institute for Portfolio Alternatives. “CAIS has been a driving force behind these critical strategic initiatives and will be valuable thought leader among the IPA Community.”

CAIS IQ recently added rich media formats such as video, webinars, and podcasts to accelerate advisor engagement, resulting in the number of active users increasing by 21 per cent over the last month alone. The platform brings content from industry leaders to independent broker dealers via web and mobile applications designed to deliver durable and usable knowledge. CAIS IQ is modular and works best when consumed in short bursts to accommodate the busy schedules of financial advisors.

“We have found that advisors not only want to learn from industry peers and colleagues, but that they want to learn in different ways and formats than our industry has traditionally offered. By partnering with top independent broker dealers, and truly personalising the learning experience CAIS IQ breaks the paradigm for advisor education,” says Michelle Browning, Business Development Director, CAIS IQ. Browning recently joined the CAIS team to accelerate CAIS IQ’s mission to transform advisor education.

Nearly 20,000 advisors on the CAIS platform have access to CAIS IQ. Since the launch of CAIS IQ in November 2019, active advisors have accumulated more than 5,800 hours and learned over 280,000 financial concepts. Both the Investment Wealth Institute (IWI) and Certified Financial Planner Board (CFP) accept select CAIS IQ courses and webinars for continuing education (CE) credit. CAIS IQ is provided at no charge to registered clients of CAIS, which span RIAs and independent broker dealers across the country.

Like this article? Sign up to our free newsletter Author Profile Related Topics Education & Training