us west coast 2015

HFMWEEK
S P E C I A L
R E P O R T
US WEST COAST 2015
INNOVATION
A constantly evolving industry
COMPLIANCE
Meeting regulatory challenges
PARTNERSHIPS
Working with the right people
FEATURING
Cowen Prime Services // EisnerAmper, LLP //
Harneys // Opus Fund Services
001_HFMUSWestCoast-2015_cover.indd 7
18/09/2015 10:38
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17/09/2015 15:25
US WEST COAST 2015
INTRODUCTION
T
his edition of HFMWeek’s US West Coast Report
offers insight into some of the most interesting trends
and pressing challenges facing the industry. This
insight comes from some of the industry’s key players
coming from a wide range of industry perspectives.
Meeting the challenges presented by legislative
change on both sides of the Atlantic, continues to
be a matter of vital importance for the industry. In
their own ways, Dodd-Frank legislation in the US and Europe’s AIFMD are both
game-changers for funds. This report features discussion on these regulatory
changes, with particular regard to the alterations in reporting requirements
imposed on funds.
Becoming an attractive domicile for hedge funds is a competitive business.
Contributors to this year’s edition of HFMWeek’s US West Coast Report offer
analysis of new funds products being offered by some domiciles in an effort to
maintain a competitive edge.
Working with the right service providers is often vital to the success of a fund.
This report offers insight into some of the key factors to consider when choosing
service providers, as well as some analysis of developing trends in the offerings
of certain providers.
It is our hope that this year’s edition of HFMWeek’s US West Coast Report
will prove as useful as it is interesting, as it provides insight allowing you to
complement and improve your existing business practices.
Mike Sheen
Report editor
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H F M W E E K . CO M 3
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CONTENTS
US WEST COAST 2015
06
FUND SERVICES
NEW BVI FUND PRODUCTS SPUR INTEREST
FROM NORTH AMERICA AND BEYOND
10
08
WHAT LIES AHEAD?
Jack Seibald, global co-head of Cowen Prime Services, talks to
HFMWeek about the key trends and challenges facing funds, and
considers what is next for the industry
UNDERSTANDING TOTAL RETURN SWAPS
Nicholas Tsafos, partner at EisnerAmper, talks to HFMWeek about
the emergence of total return swaps and other issues affecting the
industry
Lewis Chong and Philip Graham, partners at Harneys, talk to
HFMWeek about the appeal of two new fund products in the BVI,
an incubator fund and approved fund
FUND MANAGEMENT
FUND SERVICES
12
FUND SERVICES
CONFRONTING INDUSTRY TRENDS AND
CHALLENGES
Stephen Giannone of Opus Fund Services speaks to HFMWeek
about significant industry trends and challenges, and the role
technology plays in Opus’ offering
4 H F M W E E K . CO M
004_HFMUSWestCoast2015_contents.indd 4
18/09/2015 14:16
Untitled-1 1
21/07/2015 12:18
US WEST COAST 2015
NEW BVI FUND
PRODUCTS SPUR INTEREST
FROM NORTH AMERICA
AND BEYOND
LEWIS CHONG AND PHILIP GRAHAM, PARTNERS AT HARNEYS, TALK TO HFMWEEK ABOUT THE APPEAL OF TWO
NEW FUND PRODUCTS IN THE BVI, AN INCUBATOR FUND AND APPROVED FUND
Philip Graham heads
up Harneys’ investment
funds team in the BVI and
advises on all aspects
of the formation and
restructuring of investment
fund vehicles. He sits on
the Executive Council of
the BVI Investment Funds
Association.
HFMWeek (HFM): Can you describe these new funds
products in broad terms?
Philip Graham (PG): The ‘incubator fund’ and the
‘approved fund’ are two new lightly-regulated fund products, which are primarily aimed at start-up and emerging
managers, and those managing funds for smaller groups
of closely connected investors. The new legislation that
governs these products is the Securities and Investment
Business (Incubator and Approved Funds) Regulations
(SIB regulations) 2015, which came into force on 1 June
2015.
HFM: What makes them unique in the marketplace?
Lewis Chong (LC): Both the incubator fund and
approved fund offer the distinct market advantage in the
BVI of being able to commence trading within two business days of lodging a completed application for approval.
Also, legal costs should be lower than those associated
with setting up a BVI private or professional fund or a
Cayman 4(3) fund. This is because the SIB regulations
allow for these funds to use short-form term sheets where
appropriate rather than detailed offering documents.
When you combine this legal cost saving with the option
to appoint only the service providers that the manager
believes the fund requires (rather than having to appoint
third parties at the outset that the fund simply does not
need), these products provide an efficient entrance into
the marketplace at a low price point. Thereby satisfying a
key requirement for most start-up or emerging managers.
HFM: How do they differ from one another?
PG: Here are the facts and figures: The incubator fund is
permitted to operate for two years (with the possibility of
one additional year) with no functionaries (i.e. administrator, custodian or manager) and no requirement to appoint
an auditor. Although, clearly if the manager decides that
one or more of these providers is necessary, they can be
appointed immediately. This level of flexibility is contingent upon the fund remaining within the relevant thresholds applicable to an incubator fund at all times, which are:
• A maximum of 20 investors;
• A minimum initial investment of $20,000 by each investor
• A cap of $20m on the value of the net assets of the fund
Prior to the end of the two or three-year term (as applicable) or upon exceeding any of the specified thresholds,
the fund must elect one of the following options:
• Apply for recognition of the fund as a private fund or
professional fund by preparing an audit demonstrating its
current financial position and compliance with the SIB
regulations and submitting the application to the Financial
Services Commission of the British Virgin Islands (FS
commission)
• Apply to the FS commission for approval as an approved
fund
• Wind up its operations as a regulated fund
• Liquidate the fund completely
The approved fund is aimed at managers who would like
to establish a fund for a longer term, but on the basis of a
more private investor offering. So it holds appeal for family
offices or an investor base of close connections. It also has
two relevant thresholds:
• A maximum of 20 investors at any one time
• A cap of $100m on the value of the net assets of the fund
It has similar characteristics to the well-established private
fund regime in the BVI including no minimum initial
investment for the investors, but unlike the private fund,
the approved fund is not required to appoint an auditor, a
manager or a custodian. It is, however, required to appoint
an administrator, which will be reassuring to potential
investors.
Unlike the incubator fund, the approved fund does
not have a restricted validity period and can continue to
operate as an approved fund for the full duration of its
lifetime, unless:
• A decision is made to voluntarily apply to the FS commission to recognize the fund as a private or professional
fund
• It is required to convert into a private or professional
fund upon exceeding one of the relevant thresholds
• It winds up its operations as a regulated fund
6 H F M W E E K . CO M
006_007_HFMUSWestCoast15_Harneys.indd 6
18/09/2015 16:38
FUND SERVICES
marketing perspective, the manager can hold out the fund
as having been subject to a regulatory regime and regulatory oversight from incorporation.
• The board of the fund elects to liquidate the fund completely.
HFM: What types of managers are inquiring about the
incubator fund?
LC: This product appeals to start-up and emerging managers who want to build a track record while avoiding or
deferring some of the overheads connected with a fully
regulated BVI professional or private fund or a Cayman
4(3) fund. They can literally set up their corporate structure and appoint a low-cost broker initially and then set
about building a track record. In due course, as their track
record and investor base grows, the manager can start
engaging with prime brokers/custodians, administrators
and auditors on an as-needed basis. I do note, however,
that regulatory requirements in a manager’s home jurisdiction may mean that certain service providers need to be
appointed from the outset (e.g. auditors).
I think this product may also be a useful alternative to
the Cayman 4(4) fund. A 4(4) fund in Cayman allows a
manager who has 15 or fewer investors in their fund to
keep that fund outside of the Cayman regulatory regime,
thereby avoiding the need to produce an offering document and appoint service providers.
The downside is that the manager has to give a majority of those investors the right to remove and appoint the
directors of that fund. With an incubator fund, you get the
same benefits as a 4(4) fund and you also avoid having to
grant the investors this voting right. In addition, from a
Lewis Chong is
a partner in Harneys’
Investment Funds
Department and is
based in Vancouver. He
advises North American,
European and emerging
markets managers on
the establishment of new
funds and restructuring of
existing funds.
WE HAVE SEEN A ROBUST RESPONSE TO THE
LAUNCH OF THESE PRODUCTS ACROSS A WIDE
VARIETY OF COUNTRIES IN THE GLOBAL FUNDS
SPACE, INCLUDING EMERGING MARKETS
”
006_007_HFMUSWestCoast15_Harneys.indd 7
HFM: And the approved fund?
PG: I think many of the points Lewis raised in relation
to the incubator funds will be relevant here. If you have
a manager who started out with an incubator fund, an
approved fund is an excellent next step before going to
full professional or private fund status. The cost benefits
of having fewer fully fledged service providers also still
apply. In addition, I think this product might be particularly useful for family offices. As mentioned earlier, there
is no expiry date for approved funds. So those family
offices, which have a fixed number of investors that will
not grow and who have built up a lot of trust with a long
standing client base, may find approved funds an attractive and very stable vehicle, especially as it allows them to
keep overheads down within the context of a light-touch
regulatory regime.
HFM: Which markets are most interested in trying
these funds products?
LC: As a BVI and Cayman funds lawyer practicing on the
West Coast, I have fielded quite a few inquiries from US
managers seeking to establish their first fund. In fact, the
launch of our first incubator fund came from an instruction from a client based on the West Coast.
PG: We have seen a robust response to the launch of these
products across a wide variety of countries in the global
funds space, including emerging markets in Latin America
and Asia. The attraction of both products is turning heads
in these regions because they are lightly regulated, quick
to commence trading and offer the prospect of lower legal
costs. But they also offer the credibility that comes with a
stable, internationally recognized funds jurisdiction such
as the BVI.
We are very proud to say that the launch of these two
new products demonstrates the FS commission’s absolute
commitment to ensure that the BVI remains at the forefront of the options available for any start-up or emerging
manager in 2015 and beyond. ■
H F M W E E K . CO M 7
18/09/2015 15:21
US WEST COAST 2015
WHAT LIES AHEAD?
JACK SEIBALD, GLOBAL CO-HEAD OF COWEN PRIME SERVICES, TALKS TO HFMWEEK ABOUT THE KEY
TRENDS AND CHALLENGES FACING FUNDS, AND CONSIDERS WHAT IS NEXT FOR THE INDUSTRY
Jack Seibald
is global co-head of Cowen
Prime Services, LLC. He
was a co-founder and
managing member of
Concept Capital Markets,
LLC until its acquisition
by Cowen Group, Inc. in
September 2015. He has
been affiliated with the firm
and its predecessors since
1995, and has extensive
experience in prime
brokerage, investment
management, and research
dating back to 1983.
HFMWeek (HFM): What are the most significant
regulatory developments facing fund managers at the
moment?
Jack Seibald ( JS): I see the impact on fund managers
from regulatory changes from two distinct perspectives:
First, fund managers have had to change the manner
in which they operate their businesses because of the
regulatory schemes implemented in the US under the
Dodd-Frank legislation and in Europe under AIFMD.
Perhaps most importantly are the regulatory reporting
requirements that were imposed under these rules. Fund
managers who meet the regulatory AuM thresholds for
such filings are now obligated to file such reports with the
respective regulatory bodies in the jurisdictions where
they operate and where their investors and prospective
investors reside. While fund managers are no strangers to
the concept of issuing reports to their various constituencies, including investors, administrators and auditors, the
comprehensive nature of the regulatory reports has taken
this responsibility to another level.
Included in the information
required in such filings is a great
deal of detailed information about
the risks associated with the fund
manager’s portfolio, including the
notional exposure of the various
instruments held, the amount of
leverage implied by such holdings
relative to the underling capital
employed, as well as the counterparties (banks, brokerages) to
which the fund is exposed. While
some of the data is rather easily
produced, much of the content of
these regulatory reports requires
8 H F M W E E K . CO M
008_009_HFMUSWestCoast15_Cowen.indd 8
in-depth analyses and often a great deal of input and assistance from service providers, which of course comes with
an associated cost to the fund manager. With the regulatory reporting obligations, fund managers now face the
reality that all reports shared with investors must contain
and/or reference data that is consistent with that contained in the reports filed with regulators. Discussing with
investors the strategies and metrics of the investments
made in the fund, with any data that differs from or contradicts with the regulatory reports, is an invitation to
litigation or worse.
Second, fund managers are dealing with the changing
prime brokerage environment because of the impact that
regulatory changes are having on banks and prime brokers.
Basel III and other capital requirement rules imposed by
banking regulators in the US and EU are sharply curtailing
balance sheet usage by the largest financial institutions.
The changes have caused these banks to more thoroughly
review their prime brokerage relationships, including the
extent to which funds are utilizing the banks resources, including their balance sheet, and the
returns they are getting from the
revenues generated by the client.
Evidence has been mounting
since the middle of 2014 that
prime brokers are pulling back
their support of hedge funds, and
many fund managers have had to
face higher costs while many others have had to seek alternative
custody and clearing solutions
for their funds. This issue will
continue to impact fund managers for the foreseeable future as
A RENEWED EMPHASIS ON
PORTFOLIO RETURNS AND
PERFORMANCE WILL MARK
THE HEDGE FUND INDUSTRY
OVER THE NEXT FEW YEARS
”
18/09/2015 14:13
FUND MANAGEMENT
the full impact of the bank retrenchment
has yet to be felt.
IT IS CRITICAL TO ENGAGE SERVICE
PROVIDERS THAT OFFER THE
SOLUTIONS THAT MEET THE
SPECIFIC NEEDS OF THE FUND,
WHICH HAVE A DEMONSTRATED
EXPERTISE IN BOTH THE STRUCTURE
OF THE FUND BEING MANAGED
AND THE SPECIFIC INVESTMENT
STRATEGY BEING EMPLOYED
HFM: As well as regulation and compliance, funds are increasingly having
to handle more intense demands and
requirements from their clients. What
can funds do to ensure they are meeting these increased needs?
JS: Fund managers need to make sure
that they are operationally sound and
institutionally ready. At its core, this
means developing and implementing a
thoughtful business plan for the investment business, clearly articulating the
investment strategy being employed, and
establishing the credentials of the investment team and its support structure. It
also means engaging the right service
providers to serve as trusted partners in
their support of the investment firm, be
it legal counsel, fund administrator, auditor, or prime brokers. Having capable and
reputable service providers will also provide an additional layer of credibility to investors.
Finally, it means having a flexible structure that can
accommodate investors in the manner through which
they prefer to invest. The days of the one-man shop
or the solo-practitioner service provider are long gone
and the threshold for access to the institutional capital
pool, be it family offices, fund of funds, endowments,
and particularly pension funds, has risen dramatically.
These investors come armed with extensive DDQs, and
managers need to be able to clear the operational hurdle
of the first few pages if they have any hope of getting a
shot at discussing the merits of their investment strategy
and process. Providing investors with enhanced, consistent, and transparent portfolio reporting is also critical to
developing and sustaining credibility, and establishing
and maintaining the ability to do so is critical to the longterm success of the fund.
HFM: How important is it to work with the right
business service providers in order to succeed?
JS: It is critical to engage service providers that offer the
solutions that meet the specific needs of the fund, which
have a demonstrated expertise in both the structure of
the fund being managed and the specific investment
strategy being employed. Service providers should also
have the capabilities to properly serve the fund firm as it
evolves and grows. Many of the high-calibre service providers understand the notion of engaging fund managers
early and providing reduced fees for an interim period,
and we would encourage managers to avail themselves of
such opportunities.
We have too often in the past seen start-ups opt for
the absolute least expensive service providers with the
idea that they will upgrade providers once assets grow
and the cash flow of the business can sustain the higher
fees. Unfortunately, not having credible service providers most often becomes a disqualifying factor for potential investors. Additionally, the frictional costs related
”
to engaging and disengaging with service
providers frequently negates whatever savings might have been achieved.
HFM: An industry concern of increasing relevance is cyber-security. What is
Cowen Prime Services doing to ensure
best practice in this area?
JS: As an SEC registered broker/dealer
and member of FINRA, we are subject to
the strict operating procedures related to
cyber-security imposed by the industry’s
regulators. Our team has developed and
implemented tight cyber controls, and
established disciplined procedures aimed
at protecting client data. In addition to the
systems we employ to monitor for data
breaches and the regular testing our IT personnel performs on the integrity of our fire
walls, we also contract independent third
parties to test our systems and procedures.
We have also undergone cyber-security
audits by our regulators. Perhaps most
importantly, we have over the years stressed with our
colleagues the importance of the integrity and security
of our client information, and regularly remind everyone
of the simple, common sense things we can do in our
everyday behaviour to properly protect our clients and
our firm from those seeking to do no good.
HFM: What do you expect to be the most significant
trends in the next 12-18 months?
JS: A renewed emphasis on portfolio returns and performance will mark the hedge fund industry over the next
few years. Hedge funds have historically aimed at delivering outsized returns regardless of market conditions.
Funds have done this through strategies that focused
on delivering alpha from longs as well as shorts, and
by understanding that outsized returns also generally
required greater risk or volatility of those returns.
In recent periods, perhaps in part because of the dramatic rise in the prominence of institutional investors in
hedge funds, it is apparent that many managers altered
their behaviour and assumed a posture of reduced risk
in their portfolios as that is what was desired by these
pensions and endowments. Managers appear to have
been “retrained” by these investors and became satisfied
asset gatherers rather than alpha generators. No one then
should be surprised by the convergence of returns and
the overall lacklustre fund industry performance since
the global equity markets bottomed in the spring of
2009. This underperformance has not gone unnoticed
and investors have increasingly raised concerns over the
high fees charged by hedge funds.
Nothing will make talk of high fees fade faster than evidence of a return to outsized returns, and in my view, the
alpha generators will again gain the attention of investors
seeking such returns in an otherwise uninspiring market
environment. Those managers who have become exquisite explainers of everything they do to mitigate risk may
have to remember how to start discussing their alphagenerating strategies and indeed delivering on those. n
H F M W E E K . CO M 9
008_009_HFMUSWestCoast15_Cowen.indd 9
17/09/2015 14:21
FUND SERVICES
US WEST COAST 2015
UNDERSTANDING TOTAL
RETURN SWAPS
NICHOLAS TSAFOS, PARTNER AT EISNERAMPER, TALKS TO HFMWEEK ABOUT THE EMERGENCE OF TOTAL RETURN SWAPS AND OTHER ISSUES
AFFECTING THE INDUSTRY
Nicholas Tsafos is
an audit partner with more
than 26 years of diversified
accounting and auditing
experience. His practice is
primarily devoted to hedge
funds, private equity funds,
broker-dealers in securities,
registered investment
companies and investment
advisors. He also works
with public companies and
public offerings as well as
complex private companies.
HFMWeek (HFM): What are the key industry
trends you are currently seeing?
Nicholas Tsafos (NT): Hedge funds have used total
return swaps to obtain leverage for years. However,
prime brokers are asking some of my clients to use total
return swaps as opposed to buying actual equity securities. Prime brokers are encouraging hedge funds to do
this because it is more beneficial from the broker’s perspective, in terms of meeting their capital requirements
under Dodd Frank and Basel III regulation.
The idea underpinning this advice is that a total
return swap is going to give hedge funds the same
features, from an investment perspective, as buying the securities directly. For example, if they
were to buy Apple shares or they
were to buy a total return swap
that mimics the performance of
Apple shares, in theory the hedge
fund would see the same results.
However, in reality it would be far
more costly for the hedge fund
to buy a total return swap rather
than the actual Apple shares. A
total return swap does not give
the same tax consequences in
some situations, it is not as liquid as directly purchasing shares
and the amount of disclosure in
the financial statements is far
more significant. The increase
in financial statement disclosures is due to the inherent valuation issues with a total return
swap and counter party risks. In
addition the investment adviser
could be subject to reporting
requirements under the DoddFrank Act.
Some funds are responding to and accepting this
advice from prime brokers. Others are more hesitant.
But if a prime broker says to a fund that they will no
longer service them. Due to the cost of capital based on
the structure of these transactions they may be forced
into doing it. It is a trend that is driven by regulation
that prime brokers and banks have to follow. Therefore
they are compelled to put pressure on the hedge funds
they service.
For the typical US investor in a hedge fund, it is difficult to see any direct advantages deriving from opting
for total return swaps over buying actual equity securities unless they want leverage. However, an advantage
from this format may be seen if you are a non-US
investor and the total return swap meets the tax requirements of a foreign jurisdiction. For example, I have a
client fund that uses total return swaps for its Canadian
investors. As a result their investors get very favourable
tax treatment.
HFM: What is EisnerAmper advising clients in this
respect?
NT: In terms of the financial statements perspective,
at EisnerAmper we are advising
our clients to think carefully and
discuss with us before they begin
using total return swaps. There
are a number of questions they
must consider. For example, is the
fund looking at a standard return
swap? What agreement is in place
to ensure the fund has the proper
disclosures? What nuances are in
the agreement that might create
additional risks? On our clients’
behalf we must plan for the consequences of entering into a total
return swap.
From a regulatory perspective we
are advising clients to speak to
counsel and develop policies and
procedures to meet the regulators
requirements.
A TOTAL RETURN SWAP
DOES NOT GIVE THE SAME
TAX CONSEQUENCES IN
SOME SITUATIONS, IT
IS NOT AS LIQUID AS
DIRECTLY PURCHASING
SHARES AND THE AMOUNT
OF DISCLOSURE IN THE
FINANCIAL STATEMENTS IS
FAR MORE SIGNIFICANT
HFM: How do you think this
trend will affect the industry in
the long term?
NT: In the long term hedge funds
will begin to move away from
certain large prime brokers, such
as Goldman Sachs or Morgan Stanley. As a result we
will see funds moving to smaller prime brokers. These
prime brokers are more inclined to buy securities
directly, rather than through total return swaps.
If hedge funds continue to use total return swaps,
having a clearing platform that creates more transparency and gives investors the option to see what is happening in the market in real time. Some prime brokers
are already using this kind of platform. This is poised
to become a much larger trend. It has the potential to
change where instruments are being traded. ■
”
10 H F M W E E K . CO M
010_HFMUSWestCoast15_EisnerAmper.indd 10
18/09/2015 14:15
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15/09/20
15 16:2
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subs ad_203X273.indd 1
18/09/2015 10:06
US WEST COAST 2015
CONFRONTING INDUSTRY
TRENDS AND CHALLENGES
STEPHEN GIANNONE OF OPUS FUND SERVICES SPEAKS TO HFMWEEK ABOUT SIGNIFICANT INDUSTRY TRENDS AND
CHALLENGES, AND THE ROLE TECHNOLOGY PLAYS IN OPUS’ OFFERING
1 2 H F M W E E K . CO M
012_013_HFMUSWestCoast15_Opus.indd 12
17/09/2015 15:56
FUND SERVICES
HFMWeek (HFM): What do you see as the greatest
regulatory challenges facing the industry at this time?
Stephen Giannone(SG): Regulatory challenges are
clearly the topic that most concerns clients and their
service provider partners the most. Apart from getting
themselves into compliance with the most recent regulatory information, funds and service providers have had
to essentially take a top-down look at their operational
infrastructures to measure if they can or cannot currently
be in compliance.
This review is not just creating and adding a report
to some month-end package by a fund administrator. This involves technology, human resource, process
and accountability upgrades amongst other challenges.
At Opus, we have taken the long view for quite some
time and have put ourselves through regular meticulous
reviews of our operations team, our staffing, new hires and
the skill sets they bring to the teams, our entire technology
platform and clearly our management of the whole process. We have always felt that if you are not in the forefront
and getting ahead of any anticipated regulatory changes
and challenges, then you will be fighting an impossible
uphill battle with your client’s needs and your own ability
to scale and improve.
HFM: What are the most significant industry trends
you are currently seeing? How do you expect these
trends to develop over the next 12-18 months?
SG: Significant industry trends are those that occur as
discussed with regulatory challenges but also with adjusting to a new paradigm in investor demands as well as new
service provider processes and requirements.
Specific to investors, it is always the biggest challenge
for a fund to attract capital. This is not a mystery.
The added challenge over the past few years has
been the degree and depth of investor inquiries
and due diligence requirements for fund managers to meet. Perhaps in the past a fund manager’s
previous track records and ‘pedigree’, if you will,
were enough to attract at least launch capital. But
that has clearly changed. This ties in to what I
mentioned before about being able to meet your
client’s needs, this means being able to provide
due diligence information on your firm quickly,
accurately and being ready to discuss with our client’s investors.
In addition, service providers have had to realign their process controls to provide the required
transparency for regulators and investors. At
Opus, we have maintained our SSAE16 (formerly
SAS70) certification each year without fail and
we are reviewed by a top-four audit firm to give
additional comfort to our clients.
HFM: How are these trends and challenges
affecting the role of the hedge fund administrator?
SG: Fund administrators have clearly had to meet
new regulatory, investor and client challenges with
additional, sometimes very significant, investments in their platforms. Perhaps it may be easy
to say, but in practice, it is a very serious issue for
012_013_HFMUSWestCoast15_Opus.indd 13
all service providers. Opus has made many new investments into our platform over the years. This has ranged
from additional staff and additional offices to significant
investments technology and process controls. We conduct
offsite meetings for management and also senior staff to
consider a range of options, ideas and improvements that
we continually evaluate and then put into practice.
Stephen Giannone
joined Opus Fund
Services as president in
September 2008. Previously,
he was head of client
implementation at Omnium
and Spectrum Global
Fund Administration units.
Giannone has more than
20 years of experience
across the hedge fund,
administration, prime
brokerage and clearing
industries leading global
teams holding senior
positions at Deutsche Bank,
Merrill Lynch and Bear
Stearns Association.
HFM: What are the most important factors funds must
consider when choosing which service providers to
partner with?
SG: Funds need to really understand their own needs well
before they start to meet with service providers, especially
a fund administrator as the fund administrator will be
fundamental to their books and records, and the basis of
information they use to attract new capital. Only when a
fund and fund manager understand what they need, can
they effectively match a service provider to their needs.
A manager should meet with their prospective service
providers as well. In person, meetings can go a long way
to making sure you will receive the attention you need as
well as meeting the people whom are being said to have
the skills you require to service your fund without issue.
Also, and I cannot emphasize this enough, a manager
should ask to see a demo of the platform highlighting
how they would operate on a daily basis with their fund
administrator. I cannot tell you how many funds Opus has
converted from competitors where we have heard very difficult stories of being sold something that simply did not
work as advertised, to put it mildly.
HFM: How important is technology for the services
Opus provides its clients?
SG: Simply said, technology is everything. It is just
impossible to be as effective as a global, full-service
fund administrator like Opus with all of the regulatory, investor relations, asset class, compliance
and reporting challenges, among others that need
to be dealt with and handled without fail. Opus
has made continuous, significant investments in its
technology platform that deal with fund accounting, portfolio accounting, banking, investor relations and compliance functions. There is little
reason to believe that the changing landscape of
fund administration and hedge funds in general
will require anything different in the future. I think
the real difference will come down to those firms
willing to make the investments and those whom
will do otherwise. ■
IN PERSON MEETINGS
CAN GO A LONG WAY TO
MAKING SURE YOU WILL
RECEIVE THE ATTENTION
YOU NEED AS WELL AS
MEETING THE PEOPLE
WHOM ARE BEING SAID
TO HAVE THE SKILLS YOU
REQUIRE TO SERVICE
YOUR FUND WITHOUT
ISSUE SPACE, INCLUDING
EMERGING MARKETS
”
H F M W E E K . C O M 13
17/09/2015 15:57
S E R V I C E D I R E C TO R Y
US WEST COAST 2015
Christian Bekmessian // T: +1 212 891 4062 // [email protected];
Peter Cogan // T: +1 212 891 4047 // [email protected]
EisnerAmper LLP is a premier full-service accounting, tax and administration firm with global capabilities. EisnerAmper has led the way in establishing and
building a highly trained and dedicated Hedge Fund Group. Our professionals have experience and expertise in the intricacies of the regulatory and tax
environment, the valuation of complex financial instruments and the challenges of maintaining strong accounting and investment controls. The professionals
of EisnerAmper have a decades-long service record to the financial services industry, giving us an understanding of the problems you face on a daily basis, as
well as the ability to provide practical solutions. www.eisneramper.com
Jack Seibald, Managing Director, Global Co-Head of Prime Brokerage Services // Direct: +1 516 746 5718 // Mobile: +1 516 359 7503 //
[email protected] // Cowen Prime Services, 1010 Franklin Avenue, Suite 303, Garden City, NY 11530
Cowen Prime Services, LCC offers comprehensive brokerage and related services that provide traditional and alternative investment managers with customisable
and scalable solutions. We were built by former investment managers to serve hedge fund managers, managed account platforms, institutional investors, family
offices, and registered investment advisers with turnkey solutions designed to free clients to focus on their core competencies. Our offering features world-class
custody and clearing options, multi-asset class capabilities, leading execution and order management systems, a seasoned execution desk, a range of financing
options, a highly professional operations and customer support team, comprehensive portfolio reporting capabilities, and capital introduction.
Lewis Chong // [email protected]
Harneys is a leading global offshore law firm practising BVI, Cayman, Anguilla and Cyprus law. Harneys advises on all aspects of the life of a fund including formation,
restructuring and closure, both in distressed and planned scenarios.
Robin Bedford, CEO // [email protected] // (441) 234-0004 //
Stephen Giannone, President & Head of Sales // [email protected] // (312) 952-1455 //
Jorge Hendrickson, Business Development // [email protected] // (646) 470-6957
Opus Fund Services is an award winning independent fund administration firm. Within a SSAE16 approved process, Opus uses unique technology and flat fee pricing to
provide automated, integrated middle & back office administration services to domestic and offshore hedge fund and alternative investment vehicles. The ONE platform
has received widespread industry recognition including “Best Overall Fund Administrator with AuA < $30bn” by HFMWeek, and Top-Ranked Fund Administrator by Global
Custodian for an unprecedented five consecutive years. For more information on Opus Fund Services, please visit www.opusfundservices.com..
14 H F M W E E K . CO M
014_HFMUSWestCoast_directory.indd 14
18/09/2015 14:30
“…a formidable team in
the offshore investment
funds space…”
Legal 500
HARNEYS | Investment Funds
Delivering fast, practical and trusted offshore
www.harneys.com
legal services for 55 years.
Anguilla
British Virgin Islands
Cayman Islands
Cyprus
Hong Kong
London
Mauritius
Montevideo
Sao Paulo
Singapore
Tokyo
Vancouver
Mauritius service provided through an association with BLC Chambers.
Untitled-1 1
17/09/2015 10:08
BROKERAGE SERV
E
M
ICE
I
PR
S
Custodian
Options
Portfolio Analytics
& Middle Office
COMPREHENSIVE SOLUTIONS
FOR INVESTMENT MANAGERS
Business
Consulting
Execution
Services
Financing &
Stock Loan
Capital
Introduction
DESIGNED TO
LET YOU FOCUS
ON WHAT’S IMPORTANT
KERAG
E BROTechnologyE SERVI Client
M
I
CE
PR
& Reporting
Services
S
Portfolio Analytics
& Middle Office
Business
Consulting
Custodian
Options
Cowen Prime Services offers a comprehensive suite of brokerage and related
services that provide traditional and alternative investment managers with
solutions that are customizable and scalable. The firm was built by former
Capital
investment managers to serve hedge fund managers,
managed
account platforms,
Introduction
institutional investors, family offices, and registered investment advisors with
turn-key solutions designed to free its clients to focus on their core competencies.
Technology
Client
Our offering features world-class custody and clearing options,
multi asset class
& Reporting
Services
capabilities, leading execution and order management systems, a seasoned
execution desk, a range of financing options, a highly professional operations
and customer support team, comprehensive portfolio reporting capabilities, and
capital introduction.
Jack D. Seibald
Managing Director,
Global Co-Head of
Prime Brokerage Services
516.746.5718
[email protected]
www.cowenprime.com
Untitled-1 1
Michael S. Rosen
Managing Director,
Global Co-Head of
Prime Brokerage Services
516.746.5723
[email protected]
Execution
Services
Financing &
Stock Loan
Penn-Miller Jones
Managing Director,
Head of
Prime Brokerage Sales
212.419.3949
[email protected]
Member: FINRA, NFA and SIPC
18/09/2015 09:53