Alternative Investment Management Association

AIMA JournalThe Global Forum for the Global Alternative Investment Management Industry

Q1 2010 www.aima.org No. 82

I am delighted that the AIMA Journal, our flagship quarterly publication, is back at the start of our 20th anniversary year. I do hope you find it an enjoyable and valuable read.

It is now almost exactly a year since we, as the global hedge fund industry association, publicly announced our support for the principle of transparency - we said that it was desirable that all hedge fund managers should be registered and authorised by the authorities, and that the larger managers reported data of systemic relevance.

If the concern of international policymakers after the crisis was that they had insufficient information about the build-up of systemic risks in financial markets, our response on behalf of our industry was to offer our full co-operation in contributing to structures that would supply them with the timely, relevant information which they needed to address financial stability issues.

Our announcement came before the G20 summit in London, and it was gratifying that the path that that summit set for the regulation of our industry was on these principles.

Our work globally since then has been about working with individual regulators and with supranational bodies to create the right supervisory framework for the industry. After all, we share their desire for improved financial stability.

Transparency is at the heart not only of the industry’s approach towards supervision but also its relationship with investors. It is right that, with the increasing maturity and sophistication of the industry and with the increasing investment in the industry by institutional investors, greater transparency is both offered by managers and sought by investors.

We believe that institutional investors now account for an absolute majority of assets under management by the industry, and that that proportion is steadily increasing. This is a testimony to the success of the industry, not least in terms of offering higher returns and lower volatility than other asset classes.

There is an alignment of interests between investor and manager in our industry that promotes sustainable and successful investment. With the industry once again receiving net inflows and returns at

their best levels for a decade, we can look forward to the future with confidence.

Finally, I would like to pay tribute to Florence Lombard, who will shortly be stepping down as Executive Director.

It is Florence who, over her many years of service, has through the strength of her personality and the breadth of her vision turned the association into a truly global organisation, and for this we all owe her an enormous debt of gratitude. On a personal note, I will greatly miss working with her and I wish her every happiness in this next stage of her life.

I very much hope you enjoy reading the new AIMA Journal - and as always, we welcome your feedback.

Looking to the future with confidence

Andrew BakerChief Executive Officer, Alternative Investment Management Association

Address froM the Ceo

2 AIMA Journal Q1 2010

AIMA’s strength is that it is a global organisation with representation across the world. I wanted to look at

some of the key challenges we will be facing globally this year.

eMeA

So great was our concern about the European Commission’s (EC’s) proposed Alternative Investment Fund Managers (AIFM) Directive that we mobilised the industry on an unprecedented scale to respond to it. The original proposal from the EC had provisions in it that would have adversely impacted the industry globally, not just in Europe. I would just like to take this opportunity once again to thank all of you who have been involved in, or supported, our campaign. It has been extremely gratifying that the industry has responded to this grave threat with such a display of unity.

We have made considerable progress since the original draft of the Directive was published last April, and it is encouraging that the new Spanish Presidency of the EU has said that it will build on the good work of the Swedish Presidency. But there is still a long way to go. We hope that our sensible and moderate message – that we support good regulation and are offering our assistance to policymakers to help them produce that – will prevail.

For more on our AIFM Directive campaign, turn to page six.

the Americas

In the U.S, we support many of the regulatory measures likely to be passed this year. In common with our position elsewhere around the world, we would welcome the registration of managers and the reporting of systemically relevant information by larger managers in the U.S..

We are, however, also concerned about regulation in the U.S. that could negatively impact both the global industry (for example, through ‘dual’ registration) and the U.S. industry (for example through

disproportionate contributions to the proposed Systemic Resolution Fund).

The House of Representatives voted on a version of wide-ranging legislation before the end of 2009, while the Senate has just started to debate it. Both chambers will eventually have to agree on a reconciled – third – version of the legislation before it can be sent to President Obama for his approval. And we await further details about the President’s banking proposals with interest.

In Canada, the implementation of National Instrument 31-103 will mean all hedge fund managers will have to register with securities regulators.

Also in Canada, new accounting standards and the implementation of International Financial Reporting Standards will affect both how hedge funds report their net asset values and how they determine the values of their underlying securities.

Furthermore, a national harmonised sales tax on all goods and services in Canada will affect the tax treatment of hedge fund management fees.

Meanwhile, our National Group in the Cayman Islands has much to look forward to in 2010. Fresh from the positive reviews the jurisdiction has received from the IMF and UK government and after the Cayman Islands Monetary Authority’s accession to IOSCO last year, Cayman in 2010 can be expected to strike yet more bilateral agreements on co-operation and the exchange of information with OECD member states.

At the same time, AIMA Cayman will continue to support initiatives that enhance the Cayman Islands’ international reputation for openness and transparency.

Asia-Pacific

While Hong Kong’s existing robust set of short-selling rules meant that the jurisdiction was one of the few international financial centres in the world not to place a temporary ban on such activities during the financial crisis, the

authorities there are nevertheless planning gradual changes to the regulatory system in 2010. In Hong Kong, of course, mandatory registration and independent administration are already cornerstones of the jurisdiction’s regulatory system.

In Singapore, there continues to be considerable interest from allocators. Similarly, start-up activity there has been strong over the last 12-18 months and this ought to improve further in 2010 as capital raising becomes easier. 2010 could also see an even clearer delineation between the boutiques and the institutional firms.

There are two noteworthy issues on the regulatory front in Australia. First, the Australian Taxation Office is proposing a withholding tax policy that could disadvantage foreign purchasers of Australian assets. We submitted a response to the Australian Tax Office’s Draft Tax Determinations of December 2009 (TD 2009/D17 and TD 2009/D18) in February 2010. The main points made in our submission concern the potentially negative effect for the Australian funds industry, with regard to the issues for offshore domiciled hedge funds and for Australian-sourced income for foreign investors.

And second, a short-selling regime will be introduced in Australia on 1 April 2010 that will see daily disclosures of positions to the regulator and aggregated positions made available to the market after only three days. Last year, a working group of the regulatory committee was formed when the ban for short selling was first introduced. The working group has engaged actively with regulators.

In conclusion

These are only some of the likely headlines for 2010. But whatever arises, AIMA will continue to argue that it is in everyone’s interests, whether they are policymakers who regulate or the market participants who are regulated, that we are able to produce global regulation of our industry that is transparent, proportionate, consistent and workable.

What lies in store in 2010

Address froM the Ceo

GLoBAL reVIeW

By Andrew Baker, CEO, AIMA

AIMA Journal Q1 2010 3

CoNteNts

Address froM the Ceo

SPONSORING MEMBERS OF AIMA

PrimeFundSolutions

1 Looking to the future with confidence

dIreCtIVe CAMPAIGN6 how our AIfMd campaign has progressed

reGULAtorY & tAX9 Key updates from the reg & tax department

MedIA eYe12 Media coverage of AIMA and the industry

WorLd VIeW14 News from our National Groups around the globe

short seLLING18 techInvest on the impact of Australia’s temporary ban

CAYMAN UPdAte21 Maples and Calder on Cayman’s post-crisis recovery

IrIsh oPPortUNItY17 A&L Goodbody on Ireland’s new funds legislation

NeW MeMBers22 AIMA members who joined in Q4 2009

CoNtACt Us24 how to reach us

GLoBAL reVIeW2 What lies ahead in 2010 around the world

AIMA ANNIVersArY5 A look back as we turn 20

thoUGht LeAdershIP15 tackling systemic risk by AIMA Chairman todd Groome

oBItUArY16 the hedge fund industry loses another friend

fLoreNCe LoMBArd5 A tribute to her 16 years of service at AIMA

The AIMA Journal is published quarterly by the Alternative Investment Management Association Ltd (AIMA). The views and opinions expressed do not necessarily reflect those of the AIMA Membership. AIMA does not accept responsibility for any statements herein. Reproduction of part or all of the contents of this publication is strictly prohibited, unless prior permission is given by AIMA.© The Alternative Investment Management Association Ltd (AIMA). All rights reserved.

AIMA sPoNsorING MeMBer

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CME Group provides hedge funds:

To learn more, visit our new hedge fund Web page at www.cmegroup.com/hf and our Managed Futures Resource Center at www.cmegroup.com/managedfutures.

Renaud HuckAssociate Director, Hedge Funds – EMEA

Pierre PrunierDirector, Hedge Funds – Asia

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AIMA Journal Q1 2010 5

AIMA to celebrate its 20th anniversary in 2010

AIMA ANNoUNCeMeNts

AIMA celebrates its 20th anniversary in 2010. Formed in 1990, the Association has become the leading global representative

body for the hedge fund industry.

AIMA’s origins date back to the September 1990 founding of the European Managed Futures Association (EMFA) during a gathering of 17 leading lights of the managed futures industry at a lakeside hotel in Switzerland. They were motivated by a concern that regulators and policymakers were not sufficiently educated about this type of assets. They set out with two principal aims in mind: to campaign for better regulation; and to educate investors, regulators and other stakeholders about the industry. These remain among our core missions to this day.

The Association grew steadily, and by 1997 it was re-named the Alternative Investment Management Association (AIMA) in a move that underscored its broader remit as well as its global ambitions. AIMA now has representation and offices across the world, in the Americas, Europe, the Middle East, Africa and Asia-Pacific regions. Its staff has grown from less than one – Florence Lombard

was originally assured it would be only a part-time job (see below) – to 20 current full-time staff members.

AIMA has continually demonstrated leadership and innovation, including creating the AIMA Due Diligence Questionnaires, holding the first international regulatory forum, developing the series of AIMA Sound Practice Guides, co-founding the Chartered Alternative Investment Analyst Association and launching the Hedge Fund Matrix and the Roadmap to Hedge Funds.

Much has changed since the Association’s founding. Back in 1990, there were only about 500 hedge funds and about 80 funds of hedge

funds globally, managing about $39 billion (about $64 billion adjusted for inflation) in assets. At the time, EMFA was present in five countries. Today, the hedge fund industry is worth more than $1.5 trillion in AUM while our members comprise over 1,100 firms (with over 4,500 individual contacts) in more than 40 countries. Our hedge fund manager members manage in excess of 75% of global hedge fund assets and 70% of global fund of hedge funds assets.

It is one of AIMA’s great strengths that it is able to speak for the whole industry globally. AIMA’s members include hedge fund managers, fund of hedge funds managers, prime brokers, legal and accounting services, fund administrators and independent fund directors. They all benefit from our active influence in policy development, our leadership in industry initiatives and media engagement and our outstanding reputation with regulators.

None of what we do would be possible without the tremendous involvement and support of our members, whose selfless leadership and dedicated service to the industry over the last 20 years we salute.

F lorence Lombard, AIMA’s employee number one in every sense, and former Chief Executive Officer, is shortly to step

down after a long and distinguished career. Over the last 16 years, she has worked with many of the leading lights of the hedge fund industry. For this edition of the AIMA Journal, we asked them to highlight her achievements. Here is a selection of the responses we received:- “A tireless advocate of a balanced view of the industry”- “An outstanding contribution to the global development of AIMA”- “Her strategic vision, enlightened leadership style and strong business and organisational skills have enabled AIMA to emerge as a leading industry body”- “Demonstrated a wholehearted commitment to the industry and its practitioners”- “Developed outstanding relations with regulators globally”- “Positioned AIMA so it’s respected for its competence and avoidance of conflicts of

interest”- “Showed vision to kick-start CAIA when the industry needed it”- “Provided members with outstanding value”- “Helped to establish the DDQs which became the template for many companies’ RFPs”- “Is trusted by key policymakers and regulators around the world”

- “Doing the hard yards (and interminable air miles) to put Asia on the AIMA map”- “Being the sort of person who makes people want to help… and harnessing that goodwill for AIMA”- “Achieving it all with charm in a macho industry”Most recently, Florence has served as AIMA’s Executive Director, focusing on the relationship with governments and policy advisers internationally. As part of her role, she has helped lead our AIFM Directive campaign. She will remain as a Non-Executive Director on the Council of AIMA as well as on the Board of the CAIA Association. She is also a Director of the recently-launched Institute for Global Asset and Risk Management. The hobbies listed on her bio may also hint at the next stage of her life – renovating properties, travel, writing, music and the theatre.

Everyone at AIMA – and the global industry that she has represented with such distinction - wishes her a long and happy retirement.

florence Lombard to step down after 16 years with AIMA AU reVoIr

KeY dAte

6 AIMA Journal Q1 2010

AIMA launched a major campaign to seek substantial revisions to the European Commission’s proposed Alternative Investment Fund Managers (AIFM) Directive after the draft legislation was published in April 2009. The following is an overview of the key developments with the campaign.

Please note that some of the hyperlinks in this section are restricted to AIMA members.

raising awareness

Whilst we support balanced and considered regulation and indeed the broad principles contained in the Directive, we had reservations regarding many of its proposals and their potential to cause unintended consequences. The initial phase of our campaign was built around raising awareness of the provisions in the Directive with potentially serious consequences for European pensions and savings, commercial real estate, capital flows, the competitiveness of EU financial services and the desirability of Europe as a destination for international investment.

Our campaign was a global one and emphasised that the draft Directive had ramifications for EU and non-EU fund managers, service providers and investors. As investors such as European pension funds became more aware of the threats posed by the Directive, increasing numbers began to come forward to voice their concerns. In particular, the series of interventions by a group of the largest pension funds in the Netherlands, who sent letters to the European Commission and European Parliament, helped to expand the scope of the debate beyond the hedge fund industry alone and gave additional weight to our arguments.

By the autumn of 2009, a broad consensus among influential policymakers and commentators had emerged that the Directive as originally drafted was flawed and required substantial revisions. There was a good example of this when Eddy Wymeersch, Chairman of the Committee of European Securities Regulators (CESR), which represents the 27 EU regulators, said in October 2009 that the draft Directive was unworkable and needed a rethink (Reuters reported his comments here). The success of the awareness-raising phase of the campaign has meant that we have been able to move to a new phase of engagement with policymakers in order to offer concrete, alternative solutions.

engagement with policymakers

We have provided positive, constructive support and specific technical assistance for policymakers in the interests of securing the best possible outcome for our industry.

We have stressed our positive vision for the Directive, focusing on three elements: registration and authorisation, reporting of systemically relevant data and resolution of cross border marketing issues. These elements represented the G20 vision of regulation of the industry, which we support. We argued that if the Directive featured these elements it would create a progressive framework for the industry within the European Union that addressed concerns raised about systemic risk issues.

online directive Centre

We launched our online Directive Centre in August 2009. The Directive Centre – intended as an important resource for members and the media - contains everything relevant for our campaign, including press releases, guidance notes, FAQs and other resource materials issued by AIMA; speeches and articles on the Directive and links to relevant documents, including the original draft Directive and details of the legislative process; and a quotes section featuring a host of different figures expressing their opinions. You can access it here.

Campaign intensifies

Amid our phase of engagement with policymakers, we sought to enlist as many allies as possible. With both the European Parliament and European Council studying the proposals in parallel, we undertook intensive meeting programmes with influential officials and policymakers in Brussels and across the EU. We met with key MEPs on the European Parliament’s ECON (Economic and Monetary Affairs) Committee and JURI (Legal Affairs) Committee, and a number of Finance Ministers from the EU Member States. AIMA’s Andrew Baker also gave evidence to the U.K. House of Lords committee looking at the Directive in October – you can read a transcript of Andrew’s testimony here.

We also launched a newsletter for European policymakers in the fourth quarter of 2009. You

can read it here. It was a similar initiative to the newsletter we produced for UK politicians and civil servants earlier in 2009 and was aimed principally at MEPs. It contained key industry facts and figures and addressed some of the main myths about the industry. It also highlighted the social value provided by the industry - citing higher returns for pension funds and other institutional investors, job creation and tax revenues.

Position Paper

Our signature document on the Directive, our AIFM Directive Position Paper, was published in September 2009. It was the first document that we provided to Member States who sought our technical input on the Directive and was a substantial piece of work. You can read the Paper here and the Executive Summary here.

directive rapporteur

The Rapporteur who has been guiding the Directive through the European Parliament, Jean-Paul Gauzès of the European People’s Party, was appointed in September 2009, along with several shadow rapporteurs. We knew it would be vital that we liaise closely with M. Gauzès and the shadow rapporteurs, and we issued a press release congratulating the team on their appointment and saying we were looking forward to working with them on the Directive. M. Gauzès produced his initial report on the Directive in November 2009. You can read it here, and you can read our statement on the report here. We noted that while there were some areas of progress which we welcomed, there were also many others of concern. It was notable at the time that M. Gauzès said that his proposed changes to the Directive were a “foundation, not a perfect finalised” solution and there were still “a lot of discussions to be had”.

swedish Presidency

Sweden held the rotating Presidency of the EU during the second half of 2009 and invested considerable resources in finding a compromise to the Directive. Building on from the discussions in the AIFMD Council Working Group, which was formed in May 2009, the Swedes issued several compromise texts of the Directive. Their initial

How our AIFMD campaign has progressed

AIfM dIreCtIVe CAMPAIGN

AIfMd UPdAte

AIMA Journal Q1 2010 7

text is here. You can read a media statement we issued after the first of these texts here.

Subsequent compromise texts addressed the issue of remuneration. The Swedes initially proposed a requirement to defer 40% or 60% of any bonus for three years, before amending this to say that bonuses should be deferred “over a period which is appropriate in view of the life cycle and redemption policy of the AIF concerned and is correctly aligned with the nature of the risks of the AIF”. You can read their 25 November 2009 text here. The section on remuneration was on page 78, section (m).

The Swedes issued a progress report on the Directive during the last days of their Presidency, which you can read here. They said that the four key remaining issues related to depositaries, valuation, remuneration and third country issues. They acknowledged that there was a “high degree of convergence” of views on the rest of the text. They also issued a final version of their compromise text of the Directive, which you can read here. But they were not able to reach a final compromise before the end of their term.

In an update to members at the time, we said we believed that the Swedes had made useful progress during their Presidency but given that the issues that remain to be resolved were extremely significant for our industry, the crucial question would be the attitude of the subsequent Spanish Presidency.

Interaction with MePs

As part of our continuing dialogue with MEPs, Andrew Baker addressed a lunch in Strasbourg in January 2010 of the Kangaroo Group of MEPs, which campaigns for a completion of the single market (see their website for more information). Andrew stressed that the industry was keen to work closely with European policymakers to achieve a positive result on the Directive, and his speech was well-received. Directive Rapporteur Jean-Paul Gauzès also spoken at the event.

Parliamentary amendments

We produced a list of 80 preferred amendments to the draft Directive and passed them on to sympathetic MEPs before the 21 January 2010 deadline for submissions in order for them to be proposed to the ECON committee. ECON is due to begin discussing the amendments on 22 February. Early indications are that we have been successful in having most, if not all, submitted to ECON.

spanish Presidency

We held initial meetings with representatives of the Spanish EU Presidency, both in Brussels and in Madrid, before and immediately after the Spanish took over the rotating presidency of the EU from Sweden at the beginning of 2010.

The Spanish produced their first document on the Directive, an “issues note”, on 11 January 2010, which listed the remaining issues of contention – in line with those identified by the Swedes at the end of their presidency. The issues note is here. The tone of the document is noteworthy – they say the Swedish presidency has done a “remarkable” job - something that concurs with what they have been telling us, which is that they intend to continue the work of the Swedish.

On 1 February, the Spanish authorities published a compromise (found here). We understand that this will be discussed at a series of meetings of the AIFMD Council Working Group. The negotiations on the Directive are now entering a critical phase.

Campaign contributions

Finally, we have been delighted by the very positive response to our request for voluntary contributions for our AIFM Directive campaign.

This has been the first time in the 20-year history of the Association that we have had to resort to such a call on our members and we are pleased to say that we are well on the way towards our target. It is gratifying that the global hedge fund industry has responded to such a grave threat with this display of unity.

AIfM dIreCtIVe CAMPAIGN

AIfMd - draft timeline for 2010: european Parliament and european Council

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AIMA Journal Q1 2010 9

(continued on page 10)

Please note that some of the hyperlinks in this section are restricted to AIMA members.

eMeA

AIfM directive

For information about the Directive, turn to the dedicated section on pp6-7.

VAt in the european Union

New rules concerning, in particular, the place of supply of cross border business-to-business (B2B) services came into force across the European Union in January 2010. These rules will not generally affect managers but may involve an additional administrative burden, through the requirement to submit quarterly EU Sales Lists. Because the value added tax (VAT) exemption for the management of special investment funds is not harmonised, this reporting obligation will need to be determined on a case-by-case basis. Under the new rules, the basic rule for B2B supplies is that the place of supply is where the customer is established. Where an investment manager supplies services which previously have been treated as taking place where the customer belongs, those services will continue to be so treated. It remains the case, therefore, that a UK investment manager providing investment management services to a Cayman fund or an Irish fund will not need to charge UK VAT. This Note to assist members has been prepared by Paul Hale of Simmons & Simmons, on behalf of AIMA’s Tax Committee.

short selling

AIMA submitted its response to the CESR Consultation Paper, Proposal for a Pan-european short selling disclosure regime, on 30 September 2009. Our response included the following points: - There is a lack of evidence to support CESR’s claims that short selling can/has been used abusively;- Whilst we support private disclosure of short positions to regulators (subject to a sensible threshold), we strongly oppose public disclosure of such positions. If data is to be made public, it should be aggregated and anonymised; - The private reporting threshold level of 0.1% suggested by CESR is too low. We argued that

a private reporting threshold of 2% would be more appropriate. We also proposed a similar level of 2% for public disclosure (in aggregated and anonymised form only);- A T+1 disclosure timeframe is too short, particularly given the global nature of the business. We consider that a T+2 timeframe, linked to the home state regulator’s time zone, is more appropriate; and- A global position-based reporting regime should be agreed.

UCIts IV

On 28 October 2009, the Committee of European Securities Regulators (CESR) published its Advice to the European Commission in two key areas of the UCITS IV implementation process: level two measures relating to the Management Company Passport; and the format and content of the Key Investor Information Document. For more information, click here.

otC derivatives

In October 2009, the European Commission (EC) adopted a Communication which aims to ensure efficient, safe and sound derivatives markets. The Communication, available here, set out future policy actions following the consultation in July 2009 and a public hearing the following September.

The policy actions aim to: - reduce counterparty risk, for example by proposing legislation to establish common safety, regulatory and operational standards for central counterparties (CCPs) and raising capital charges for bilaterally-cleared as opposed to CCP-cleared transactions;- reduce operational risk by promoting standardisation of the legal terms of contracts and of contract-processing;- increase transparency by, for example, requiring market participants to record positions and all transactions not cleared by a CCP in trade repositories, regulating and supervising trade repositories and increasing transparency of trading as part of the review of the Markets in Financial Instruments Directive (MiFID) for all derivatives markets including for commodity derivatives; and- enhance market integrity and oversight by clarifying and extending the scope of market manipulation as set out in the Market Abuse

Directive to derivatives and by giving regulators the possibility to set position limits. The EC stated that the proposals will be in line with the objectives agreed by the G20 and confirmed that it is willing to work with authorities in other nations to avoid the risk of regulatory arbitrage.

U.K. financial services Bill

The Financial Services Bill 2009-2010, introduced to the House of Commons on 19 November 2009 and amended during the committee stage, has several provisions which may be relevant to U.K.-based hedge fund managers, including: new powers for the Financial Services Authority (FSA) to impose short selling restrictions; powers for the FSA to develop rules on requiring regulated firms to create and maintain recovery and resolution plans (known as “living wills”); provisions providing powers to implement the recommendations of the Walker Review on remuneration; and the creation of a Council for Financial Stability to oversee systemic risk. Details of the bill can be found here.

Bank Payroll tax

The U.K. HM Revenue and Customs (HMRC) issued a short statement on 18 December 2009 clarifying the application and scope of the Bank Payroll Tax (BPT) announced in the Pre Budget Report of 9 December. The HMRC statement confirmed that stand-alone asset managers would not be affected by the tax. However, it seemed clear that, for businesses which are a division of a bank or a subsidiary of a banking group, it would be a matter of assessing on a case-by-case basis whether the tax applies in the case of employees to whom bonuses are to be paid. For more information on the HMRC statement, click here. For HMRC’s frequently-asked questions, click here.

funds Investing in Non-reporting funds

HM Treasury (HMT) published draft regulations for Funds Investing in Non-Reporting Funds (FINROFs), relating to the awaited FSA’s Funds of Alternative Investment Funds (FAIF) regime. Click here for more information.

A round-up of recent developments

reGULAtorY ANd tAX

reG & tAX

10 AIMA Journal Q1 2010

takeover Code

The Takeover Panel issued Response Statements on 16 December on extending the Code’s disclosure regime and Miscellaneous Code amendments, further steps in its consultation by PCP 2009/1 of May and PCP 2009/2 of July 2009. Click here for more on both statements.

Our response to the consultation supported the opening position disclosure and extended composite disclosure requirements (provided they were efficiently advised to the market) and called for further industry consultation before any further steps in relation to the securities borrowing and lending disclosure proposal.

fsA fees and levies

AIMA submitted a response to the FSA Consultation Paper, regulatory fees and levies: policy proposals for 2010/11. We made these main points on the proposed shift to an income-based fee measure: - it would, effectively, penalise small firms who charge performance fees and who, typically, have a small number of larger clients (funds) and relatively few approved persons;- it could result in a much less reliable basis for the FSA’s fee income as firms’ incomes, especially performance fees, are volatile;- the FSA should await testing of the income measure under FSCS in 2011, the implementation of RDR in 2012 and further analysis of likely costs impact before any decision is taken to proceed further with this proposal. Our full response can be found here.

offshore funds

HMRC published the Offshore Funds (Tax) (Amendment) Regulations (SI 2009/3139) in December 2009. The Regulations are available here, accompanied by an explanatory Memorandum.

financial services remuneration

The FSA issued a feedback statement (FS09/5) on 8 December 2009 with the welcome decision not to extend its code on remuneration policies

to other FSA-authorised firms, nor to introduce any new rules on remuneration for the time being. In issuing its feedback, however, the FSA said that it would review the effectiveness of the remuneration code in mid-2010, when it would consider the lessons learned from last year’s exercise. Click here for more information.

short selling disclosure regime

On 1 October 2009, the FSA issued its feedback statement (FS09/4) on its February 2009 Discussion Paper (DP09/1) regarding the long-term treatment of short selling. FS09/4 confirmed that the FSA’s preferred policy approach remained substantially the same as set out in DP09/1.

turner review

On 30 September 2009, the FSA published a feedback statement on the Turner Review and its associated discussion paper (DP) of the previous March. In its feedback statement, available here, the FSA noted that the key concerns raised by respondents were: (a) the importance of an international approach when looking at policy options; (b) that any measures implemented by the UK alone could damage London’s competitiveness; (c) large firms were against increased requirements for systemically important firms; and (d) the need for an impact assessment of the ‘whole package’ of reform to be carried out.

hMrC/hMt seminar

AIMA gave a seminar to more than 50 officials from HMRC and HMT. The seminar was an opportunity for HMRC and HMT to gain an increased understanding of the issues that are important to the hedge fund industry, and for open discussion of relevant matters.

UK liquidity requirements

The FSA published its final rules on the liquidity requirements expected of firms in November 2009. The provisions set out in the rules include: (a) an updated quantitative regime coupled with a narrow definition of liquid assets; (b) over-arching principles of self-sufficiency and adequacy of liquid resources; (c) enhanced systems and controls requirements; (d) granular and more frequent reporting requirements; and

(e) a new regime for foreign branches that operate in the UK. The FSA is running briefing sessions in London and Edinburgh on the new liquidity requirements, with emphasis on the implications of the rule changes and how firms are expected to comply. More information and a booking form is here.

AMerICAs

tax extenders Act 2009

The U.S. Tax Extenders Act was passed by the House of Representatives on 9 December 2009 and including the Foreign Account Tax Compliance Act (FATCA) and Taxation of Carried Interest as Ordinary Income) would, if enacted, have a substantial impact on the fund industry. Its provisions include those to: (1) increase withholding and reporting obligations on payments made to certain non-U.S. persons, including investment funds; (2) subject certain gross payments to non-U.S. persons made on specified Notional Principal Contracts to a 30% withholding tax; and (3) tax at ordinary income rates income earned on “incentive allocations” or “carried interest” by partners providing investment management services to certain partnerships.

registration and reporting

The House of Representatives passed the Wall street reform and Consumer Protection Act (H.R. 4173) in December 2009. The bill included proposals for financial regulatory reform, protection of consumers and investors, insurance issues and regulating the over-the-counter derivatives markets. It may mean that other proposals on derivatives (from the House Financial Services and Agriculture Committees and from Senator Christopher Dodd, chairman of the Senate Banking Committee) may not proceed. For more information, click here.

seC Custody rules

The U.S. Securities and Exchange Commission (SEC) published a change to Rule 206 of the Investment Advisers Act of 1940 applicable to SEC-registered investment advisers and coming into effect on 12 March, relating to custody of clients’ assets. The rules seek to address issues highlighted by the Madoff scheme in respect of investment advisers retaining custody of client assets. For more information, click here.

reGULAtorY ANd tAX

(Continued from page 9)

AIMA sPoNsorING MeMBer

PrimeFundSolutions

Since 1969, Prime Fund Solutions (PFS) has pioneered the provision of fund services and fi nancing to

the alternative asset management industry. Drawing upon our vast experience and strong presence in

key locations – offshore and onshore – PFS is in a unique position to assist in the re-domiciliation of funds.

As well as our expertise, we offer a unique client-oriented operating model, employing a robust

global infrastructure and experienced staff. Our clients have come to expect operational excellence

and superior client service for their funds and for their most important asset, their investors.

If you are interested in discussing the re-domiciliation of funds, or would like further information

Thinking of re-domiciling your fund? We’d be happy to talk.

0777_Ad PFS A4_nieuw.indd 1 28-01-10 15:51

12 AIMA Journal Q1 2010

International press coverage of AIMA and the industry

Press CLIPPINGs

MedIA eYe

AIMA and the global industry we represent receive regular and widespread media coverage in Europe, the U.S. and around the world. The following are some edited highlights, with hyerlinks to the relevant articles and broadcast clips, of the press coverage AIMA and the industry received during the latter part of 2009.

Please note that some of the hyperlinks in this section will be restricted to subscribers of the relevant publications.

AIfM directive

The Alternative Investment Fund Managers (AIFM) Directive dominated much of the coverage of AIMA and the industry during the latter part of 2009.

The coverage included the following highlights (note: some of the publications listed may require subscriptions):

- AIMA’s Andrew Baker appeared on World Business Report on BBC1 and BBC World in September 2009 to talk about the Directive. And we also recorded a TV clip of Andrew talking about the directive for our Directive Centre on our website. You can see it here.

- The results of a survey of AIMA members by independent think-tank Open Europe drew widespread media coverage. The survey concluded that the Directive could cost of the alternative investment industry $2.8 billion in its first year and $1.4 billion a year thereafter. The news was covered by, among others, Bloomberg, reuters, the daily telegraph, and City AM.

- In October 2009, Andrew discussed the progress of the campaign thus far in hedge magazine and he considered the implications of the Directive on pension funds and other institutional investors in Pensions Insight. The campaign also hit the airwaves, with Andrew a regular fixture on TV and radio reports, including this discussion on BBC Radio 4’s World At One programme.

- Later in October, hfM Week quoted Andrew expressing concern that the hedge fund industry would only have a sole representative at an important hearing of the European Parliament’s Economic and Monetary Affairs Committee on the Directive.

- U.K. newspapers the Sunday Telegraph and City AM fought a campaign against the Directive. In this article to kick off its campaign, the Sunday Telegraph quoted Andrew Baker extensively and said that we had led the lobbying effort against the proposal. Telegraph head of business Damian Reece called for “reform” here.

- The then Swedish Presidency of the European Union published its proposed compromise text for the Directive in November 2009. AIMA issued this statement to the global media; we also then issued a separate comment on the remuneration annex within the new Swedish text, expressing our concern. This was reported by the financial times, Bloomberg, reuters and Global Pensions.

- Andrew Baker gave evidence about the Directive to the U.K. House of Lords, and the full transcript of the hearing was published by the hedge fund Journal.

- In December 2009, Directive rapporteur Jean-Paul Gauzes published his proposed amendments to the draft legislation. AIMA gave its initial response to the report in this media statement. The news was reported by a wide range of international and industry publications, many of which carried elements of AIMA’s media statement. The coverage included hedge funds review, opalesque, hedge fund Journal and eurActiv.

- Even a European Parliament-commissioned study questioned the rationale behind the Directive and argued that the legislation could reduce the annual growth rate of the EU by as much as 0.2%. The news, including AIMA’s response, was carried by a number of media outlets including the Wall street Journal and the financial times.

- Our campaign drew praise from a variety of quarters, including hedge funds review, which said in December 2009 that the association had “risen to new heights” and was fighting a “sustained and fairly effective campaign”.

- In this article, columnist Simon Osborne of magazine Asian Investor supported our policy of constructive engagement with policymakers on the Directive.

- We have fought a global media Directive

campaign. In October, AIMA Canada’s Gary Ostoich told reuters that the Directive could have a major impact on Canada’s hedge fund industry. This statement came after the release of press releases in local markets around the world that set out the considerable impact of the Directive beyond the EU’s borders.

- The possible impact of the Directive on the Hong Kong hedge fund industry was reported by China daily and the Hong Kong Economic Journal, while Bloomberg assessed the Directive’s impact on Singapore and Hong Kong and Super Review magazine of Australia reported that the Directive would affect Australian fund managers.

U.s. media coverage

The latter part of 2009 was of course marked by a series of proposed legislative changes in the U.S.. These proposals culminated in December 2009 with House of Representatives voting in support of a wide-ranging Wall Street Reform Act. The Senate is currently considering its version of the eventual legislation.

As well as engaging with policymakers in the U.S., AIMA released media statements relating to the proposals on Capitol Hill. In our communications, such as this press release, we reiterated our support for the registration of U.S.-based hedge fund managers and the reporting of systemically relevant data to the SEC. But we made clear that we were worried about the potential for excessive reporting requirements overwhelming both regulators and managers.

In this media statement, we expressed concern that the asset threshold for the proposed Systemic Resolution Fund – a pool of capital that would be used to rescue firms deemed too big to fail - would be set at $10 billion for hedge funds yet $50 billion for all other financial institutions and we called for a fairer and more proportionate measure. This was picked up by a number publications including hedgeCo.net, hedgeweek, the hedge fund Journal and opalesque.

Meanwhile, we conducted a series of interviews with U.S. media organisations. The most extensive of these saw AIMA Chairman Todd Groome interviewed at length by the hedge fund Law report in November 2009.

AIMA Journal Q1 2010 13

In 1999, there was no global standard of knowledge for the alternative investment industry. AIMA helped change that in 2002 when it joined with CISDM (Center for International Securities

and Derivatives Markets) to co-found the Chartered Alternative Investment Analyst (CAIA) designation program.

Today, just eight years later, more than 3,500 financial professionals worldwide, many from AIMA member companies, have earned their CAIA designation. More will join the CAIA roster after this year’s two exam cycles – in March and september 2010. Members include a variety of professionals such as portfolio managers, financial planners, institutional investors, consultants and regulators. Their growing interest in creating AI communities has helped launch 11 CAIA chapters worldwide, including chapters in London, Hong Kong and Germany.

As membership and reputation grow, the CAIA Association, which is the sponsoring-body of the designation, has reached a milestone

in its efforts to maintain the currency of its program. Candidates sitting for Level I and Level II exams in March 2010 will be the first to use the newly published CAIA Alternative Investment Knowledge Series. The series covers the information and associated skills required for all professionals working with alternative investments, while allowing for the inclusion of future updates on a timely basis. The series is the result of collaborative work with CAIA members, industry experts, and academics, including Mark Anson, Ernest Jaffarian, François-Serge Lhabitant, Thomas Meyer, Pierre-Yves Mathonet, Richard Spurgin, and David McCarthy.

A mini quiz on the CAIA.org website allows AI savvy professionals to test their knowledge before deciding on whether the program will add to their level of professionalism. Employees of AIMA member companies who are interested in taking the September 2010 exams are encouraged to sign up early in order to secure the early registration discount. Registration for the September exams will open in early April 2010.

CAIA AssoCIAtIoN NeWs

As a founding sponsor of the Chartered Alternative Investment Analyst (CAIA) Association, AIMA is able to offer member companies exclusive discounts on CAIA examination and membership fees.

Employees of AIMA member companies are eligible for a 25% discount off the standard CAIA examination fees, and receive 60% off their first year of CAIA membership. For more information, see here.

Press CLIPPINGs

Todd was invited to discuss some of the big issues facing the global industry including regulation, disclosure, dual registration and short-selling.

In brief

Todd Groome profile: hedge funds review published a profile of AIMA’s Todd Groome, which reflected on Todd’s long career, his aspirations for AIMA and his views on the industry.

ex-Chairman wins award: hedge funds review reported that AIMA Council member and former AIMA Chairman Christopher Fawcett, senior partner at Fauchier Partners, had won the 2009 European Long-term Achievement in Fund of Hedge Funds award.

hong Kong anniversary: The Hong Kong Economic Times carried a full-page piece marking the 10th anniversary of AIMA Hong Kong in November 2009 with messages and

articles by AIMA Hong Kong’s Christophe Lee, Financial Secretary John Tsang, Simon Galpin of InvestHK and Robert Ray of CME Group.

hong Kong survey: A survey by AIMA Hong Kong that found the local hedge fund industry employed about 4,000 people was reported by Bloomberg in November 2009.

hong Kong market: The Asset magazine carried a lengthy article about the Hong Kong market based on an interview with AIMA Hong’s Christophe Lee.

short selling: the Guardian reported in October 2009 that investors would have to disclose their short-selling positions in every European company under EU proposals backed by the FSA. Andrew Baker was quoted as saying the reporting threshold had been set too low.

And opalesque in November 2009 published a round-up of reforms to short-selling and other regulations in various jurisdictions around the

world that carried statements by Andrew Baker and AIMA Australia’s Kim Ivey.

singapore regulation: Hedge funds in Singapore would “almost certainly” need to be licensed as the central bank seeks to tighten regulation of the industry, AIMA Singapore’s Michael Coleman told Bloomberg in October 2009.

Post-Madoff: AIMA Canada’s Gary Ostoich was among the Canadian hedge fund industry professionals quoted in a reuters piece about how the industry was rebuilding trust with its clients after the Madoff affair.

AIMA Canada event: The outcome of an AIMA Canada luncheon event in Toronto was reported on by reuters.

Cayman seminars: AIMA Cayman’s launch in November of a number of seminars looking at the key elements of an investment fund from a director’s perspective was covered by Cayman Net News.

designation for AI professionals recognised worldwide

14 AIMA Journal Q1 2010

News round-up from AIMA’s National Groups around the world

AIMA NAtIoNAL GroUPs

WorLd VIeW

AIMA is the only truly global hedge fund association. As a global organisation, we are uniquely positioned to address industry issues from a worldwide perspective.

During the latter part of 2009, our various National Groups around the world worked on a wide range of initiatives. Please note that some of the hyperlinks in this section are restricted to AIMA members.

AIMA Australia

AIMA submitted a response to the Australian Tax Office’s Draft Tax Determinations (td 2009/d17 and td 2009/d18) in February. The main points in our submission concern the potentially negative effect for the Australian funds industry, with regard to the issues for offshore domiciled hedge funds and for Australian-sourced income for foreign investors. We hoped that the recommendations for change made by the Australian Finance Centre Forum in its report released by Ministers on 15 January, including an ‘investment manager regime’ to provide non-resident investors with a tax exemption in respect of investments in foreign assets through intermediaries, would be taken up.

AIMA Australia also updated members about a short-selling regime that will be introduced on 1 April. The new system will see daily disclosures of positions to the regulator and aggregated positions made available to the market after only three days.

AIMA Canada

AIMA Canada updated members on regulatory and tax developments. Instrument 31-103, which will affect many areas of the Canadian alternative investment industry, was put into effect by Canadian Securities Regulators at the end of September 2009.

To help address some of the questions and issues surrounding the new requirements and deadlines, AIMA Canada’s Legal and Finance Committee produced a special section on AIMA Canada’s website, called registration reform NI 31-103.

AIMA Canada explained to members that Ontario and British Columbia would harmonize their old provincial taxes on goods with the

federal Goods and Services Tax (GST) from 1 July 2010. The result will be an increase in taxes on fund management fees, rising from 5% to 13% and 12% respectively. In addition, new rules came in at the start of 2010 which levelled the playing field between funds based in provinces having the higher melded tax rate, and those having the lower tax rate under the old provincial systems.

Meanwhile, AIMA Canada sponsored the sixth Annual Hedge Funds Care Canada gala at the Royal Ontario Museum, Toronto in November 2009. The event helped push the charity to over the $1 million mark in terms of funds raised to prevent child abuse and neglect.

AIMA Cayman

AIMA Cayman launched a series of seminars for independent directors of hedge funds during the latter part of 2009. The events also provided the local industry with useful networking opportunities.

AIMA hong Kong

AIMA Hong Kong liaised with the Securities and Futures Commission (SFC) regarding the SFC’s consultation paper on Short Selling Position Reporting and issued a response. AIMA Hong Kong also responded to the Financial Services and the Treasury Board’s consultation paper on Proposed Anti-Money Laundering Measures.

AIMA was delighted to welcome Philip Tye, Partner and Chief Operating Officer of DragonBack Capital in Hong Kong, on to our

Council (Board of Directors). Mr Tye has been a senior fixture of the Asian finance industry for the past 14 years. He co-founded DragonBack in 2007 with his two partners. Previously, he was the Chief Financial Officer of PMA, one of Asia’s biggest hedge fund managers. He has also held senior positions with Credit Suisse.

Meanwhile, AIMA Hong Kong formally celebrated 10 years in the jurisdiction in November 2009 with a cocktail reception at the Hong Kong Club. The event attracted a large gathering of participants, including representatives from the local hedge fund industry and international guests, officiated by Financial Secretary John Tsang. The event was sponsored by InvestHK, CME Group, Thomson Reuters, Prime Fund Solutions and Ernst & Young.

AIMA singapore

AIMA Singapore carried out a survey of its members and released the findings to the media. Among the survey’s findings were that Singapore is home to around 140 single-strategy and about a dozen of funds of hedge funds. It was discovered that Singapore-based hedge fund firms had about $35 billion in assets under management (or about $300 million on average). In addition, the survey estimated that the local hedge fund industry employs more than 800 professionals.

On the regulatory front, AIMA Singapore consulted AIMA members regarding the draft criteria for a new licensing regime for the jurisdiction proposed by the Monetary Authority of Singapore (MAS).

AIMA has branch offices and National Groups around the world

AIMA Journal Q1 2010 15

Policymakers looking to improve systemic risk and financial stability analysis need to identify the key drivers of systemic risk, develop a practical and effective reporting system for systemically-relevant information, and gather such data in an efficient manner from a targeted group of financial institutions from all sectors. The hedge fund industry is prepared to contribute to that analysis and process.

In the emerging sphere of supranational macro-prudential supervision, an important debate is progressing among global policymakers. Throughout the G20, policymakers and

practitioners are attempting to solve one of the fundamental challenges posed by the recent crisis: how to construct a global system of oversight and supervision capable of identifying the build-up of excesses and stresses in the financial system, and how best to address such warning signs in a timely and effective manner. The goal is to mitigate systemic risk and market melt-downs, and the related negative effects on the real economy.

What are the key drivers of systemic risk or financial instability? This is an important starting point, and as fundamental as it seems, many policymakers today do not agree on the drivers or how to define these terms.

Let’s assume that financial instability is more than market volatility or individual firm failures, but involves such extreme volatility and market disruptions that key markets cease to function, including in particular the failure of core financial functions such as the provision of liquidity and credit. Such extreme events are often the product of strong procyclical forces, exacerbating market or economic adjustments, and the stakes are even higher today given the increased inter-connectedness of global financial markets and institutions.

Thus, an important policy goal must be to better understand market dynamics, and to develop policies that reduce or modify a variety of procyclical forces in markets (eg, fair value accounting, over-reliance on risk-based capital and VAR-type models, and increasingly common risk management models and practices within and across sectors), as well as the resulting procyclical behaviour of a broad group of market participants. Policy adjustments can reduce these procyclical drivers and facilitate more diverse market behaviour, and thus improve financial stability by reducing the “crowded response” to market shocks.

It is widely acknowledged today that hedge funds were not a cause or a contributor to the systemic events of 2008. Indeed, hedge funds, as an important contributor to market liquidity and price discovery, typically provide important stabilizing and counter-cyclical influences to a variety of markets. The diversity of investment strategies and trading styles evident in the hedge fund industry provide important market stability to the frequent herding behaviour evident in many traditional investment management and banking activities.

For these same reasons, it is quite logical, even necessary, that hedge funds contribute to the supervisory analysis of markets and systemic risk.

Improving transparency

A fundamental premise underpinning current policy discussions is a desire to improve transparency; both at the market and counterparty level, and with and among supervisors. As a matter of principle, this basic premise and goal should be supported.

The global hedge fund industry, through the Alternative Investment Management Association (AIMA), its global association, in February 2009 (in advance of the G20 Finance Ministers meeting in London), announced its support for a variety of policy initiatives focused on improving transparency, including mandatory manager registration and the periodic reporting by larger managers of systemically-relevant information to supervisors and other macro-prudential authorities.

We understand that this could bring additional challenges, including the risk of creating structures that may foster regulatory overload. As such, it is important that (i) a macro-prudential or financial stability-oriented reporting system be applied consistently on a global basis, (ii) only institutions that can practically contribute to this analysis should be asked to incur the costs of doing so, (iii) supervisory capacity needs to exist to effectively use this information, and (iv) all financial sectors and relevant market participants are required to contribute.

supervisory framework

AIMA has been working with major national and supranational authorities to develop such a supervisory framework throughout 2009, and most supervisory authorities appreciate the challenges inherent in devising a reporting system for systemically-relevant information. The data gathered needs to be relevant to the risks we seek to mitigate, and it must be understood that neither the public nor the private sector can draw on infinite resources in this regard. Take a practical example: supervisors would gain little from scrutinizing every position taken by a hedge fund manager, or any other market participant. A reporting system seeking to gather too much information is more likely to conceal the building-up of risks than to uncover them, since red flags may remain hidden under a mass of data. Indeed, it is important to observe and understand the larger picture, including market and institutional linkages, in order to evaluate systemic risks.

The primary goal of such reporting is to improve the supervisory understanding of market dynamics, not to interfere in markets or to seek a “zero-failure” regime. However, the crisis has again raised questions over one of the guiding principles of prudential supervision, that of “non-zero failure.” Policy-makers should recognize that they will not be able to prevent all failures; nor is that a desirable goal. In an efficient and functioning market, some firms will fail, so the focus should be on creating brakes, buffers, or barriers in the system to prevent cascading failures, as well as the means to efficiently reallocate capital to more productive uses. As a practical matter, based on a variety of growing fiscal pressures, many governments may also be increasingly unable or unwilling to pursue large bailouts and related stimulus programs.

Tackling systemic risk

thoUGht LeAdershIP ArtICLe

reGULAtIoN

By Todd Groome, Chairman, AIMA

(Continued on page 16)

16 AIMA Journal Q1 2010

thoUGht LeAdershIP ArtICLe

Previous G7 and Financial Stability Board (FSB) studies did not find unique systemic risks created by hedge funds; in general or vis-a-vis their systemically important bank and broker counterparties. And as concerns herding behavior, hedge fund managers by design look for value and opportunity away from the herd, as part and parcel of their efforts to generate investment outperformance. Indeed, on this issue, supervisory efforts may be better spent evaluating the market behaviour of other market participants.

A few statistics may be instructive. The entire hedge fund industry manages assets worth about $1.5 trillion today. It may seem a large number, but the broader asset management industry is vast – around $62 trillion in assets under management by some estimates. By that measure, hedge fund firms manage a little over 2% of all professionally-managed assets. Of course, some banks manage more assets than the entire hedge fund industry, and do so with much greater leverage.

Nevertheless, hedge funds should not – and do not - fly under the radar. Improving financial stability means empowering supervisors to take a holistic view of the financial system. While hedge funds – and this is an important distinction - are not systemically “important” institutions based on the risk they pose to the financial system or the core services they provide, as mature market participants our industry can and should contribute to financial stability analysis by providing public authorities with systemically “relevant” information. It should also be noted that many of the largest hedge fund managers have been voluntarily sharing market and risk management information with national and international authorities for many years.

Which hedge fund managers should be asked to provide such information to supervisors? One criteria (not the only one) should be assets under management – with managers having more than $1 billion in AUM, for example, required to comply with enhanced reporting requirements. This would capture about 325 managers and about 80% of assets managed by the global hedge fund industry; providing both practical and relevant coverage. In this way, supervisors should gain a useful view of market activity via the window of hedge fund managers, including market trends and the possible build-up of various types of risks across the financial system and sectors.

risk analysis

What type of information should be gathered? Supervisors should consider a range of issues, and look beyond the popular focus on leverage. It is worth noting that the historic peak of average hedge fund leverage, set in 2006, was $2.90 for every dollar invested (2.9 times assets), according to Credit Suisse - a miniscule level compared to the 30-50 times leverage employed by some of the biggest banks at that time.

During 2007 and 2008, the average leverage employed by hedge funds was much lower. To better understand market and system risks, supervisors need to evaluate a variety of risk factors, such as (i) portfolio or balance sheet concentrations, (ii) historic and current volatility levels across markets, (iii) very importantly, liquidity conditions on both sides of the balance sheet, and (iv) leverage levels, on and off-balance sheet, across institutions and sectors. Understanding these risk factors, especially liquidity conditions, should be of primary importance and produce a better analysis of systemic risk. This is also the type of risk analysis (in general terms) that major hedge fund managers conduct on a regular basis, and possibly why numerous observers have concluded that risk management systems at major hedge funds are typically of the highest standard.

Policymakers and regulators are not alone in the desire for greater financial stability; it is in the interests of everyone operating in financial markets and the broader economy, including the alternative investment community. The G20, the FSB, the International Organization of Securities Commissions (IOSCO) and national supervisors have made a significant commitment to improve financial stability.

As part of the new regulatory framework, the hedge fund industry and AIMA are working closely with national and international supervisory authorities, and fully support their efforts to create an effective global macro-prudential system and reduce systemic risk. Otherwise, we could all be left in the dark... again.

An abridged version of this article appeared in the Financial Times’ FTfm supplement

(Continued from page 15)

Paolo Cristofolini, a veteran of the European hedge fund industry and a member of AIMA for many years, was

killed by an avalanche in Verbier, Switzerland on 3 January 2010.

Paolo was a personal friend of mine of more than 25 years. Together in 1989, before AIMA was even thought of, under a joint venture between Bearbull Asset Management and Elders Finance Group, we had established

the first ever European fund of hedge funds, incorporated in Guernsey. Paolo went on to set up Commodities Corporation, which became the Geneva arm of Goldman Sachs Asset Management, then Agora Capital Management. He also created a wine investment fund and was on the board of, or advised, several of our member companies. He will be missed by all those who knew him. Personally, I will always remember him for his extraordinary energy, passion for life and

the industry and how several years ago he had beaten a cancer scare with good humour. Our sincere condolences go to Paolo’s family and his many friends.

It has been a sad year for the European hedge fund industry, which has lost several other ‘old’ friends, including Gilles Halna du Frètay, Tony Stocks, Thierry de la Ville Huchet, Jean-Pierre Aguilar and Steven Krampf to name but a few.

hedge fund industry loses another friend oBItUArY

By Florence Lombard, Executive Director, AIMA

Ireland has enacted new legislation to enable fund companies to migrate into Ireland and be registered as Irish regulated funds without any change in the legal entity. The process aims to

maximise efficiency and to minimise any regulatory, tax or other burdens on the migrating company.

This new procedure will enable funds structured as companies to convert to EU regulated funds, enjoying the market advantage of recognised investor protection safeguards (such as independent custody and administration, including valuation). Migrating funds will have the flexibility to structure as UCITS (with the benefit of the UCITS passport), or as Irish Qualifying Investor Funds (with the benefit of greater flexibility in investment options). Other reasons why funds may migrate to Ireland would be to position themselves to deal with the potential challenges presented by both the AIFM Directive (such as the marketing of non EU funds in the EU) and OECD and EU tax initiatives affecting traditional offshore fund domiciles.

Ireland is estimated to service over 40% of global alternative investment funds as at October 2009. As at June 2009, Ireland had €1.4 trillion in total fund assets under administration, €650 billion of which are in non-domiciled funds and €703 billion in domiciled funds, according to the Irish Funds Industry Association. Many offshore funds are already serviced in Ireland and many fund promoters and investment managers may already have established funds in Ireland and will be familiar, and comfortable, with the jurisdiction.

To facilitate the migration of fund companies into Ireland, the Companies (Miscellaneous Provisions) Act 2009 (the Act) was signed into law on 23 December 2009. It includes provisions which will enable existing offshore fund companies to re-domicile to Ireland. This will be an alternative to such companies merging, or entering into a formal scheme of amalgamation, with a successor Irish fund company (which has, up until now, been the preferred method for fund companies to move to Ireland). The new process ensures that there is no change in the legal entity and thus investors remain shareholders in the same entity. This should:

- Ensure there is no chargeable event for the fund or its investors as a result of the migration as it will not involve a sale or transfer of assets or shares;

- Eliminate or significantly reduce stamp duties, other taxes and other costs relating to the migration as there will be no change in the beneficial ownership of the fund’s assets;

- Minimise delays and unnecessary paperwork;

- Make it easier to use the track record of the fund for marketing purposes.

The Irish limb of the process will be quite streamlined. It should, in summary, involve a single filing of registration documentation with each of the Irish Companies Registration Office and the Irish Financial Regulator.

The following are the key steps and requirements:

- The migrating fund will apply to the Irish Registrar of Companies to be registered in Ireland by way of continuation of existence.

- The application will be signed by a director of the migrating fund and will be accompanied by the prescribed registration documents (which will include a director’s statutory declaration in respect of the migrating fund and a declaration as to its solvency) as well as a further declaration as to compliance with the Act’s requirements by a solicitor or director.

- The migrating fund must have obtained confirmation from the Irish Financial Regulator that it proposes to authorise the applicant (whether as a UCITS or a non UCITS). This will mean that any migrating fund will have to comply with all of the relevant requirements of the Irish Financial Regulator. We anticipate that the finalisation of documentation for the Irish Financial Regulator and the Irish Registrar of Companies will run in parallel.

- The migrating fund must be solvent with no action pending to wind it up or to appoint a liquidator to it.

- Notice of redomiciliation must be served on the creditors of the migrating fund.

- Any necessary contractual consents must be obtained by the migrating fund.

- The migration process will be subject to compliance with the relevant legislative and regulatory requirements in the country of origin of the migrating fund and to compliance with the requirements of the constitution of the migrating fund.

AIMA Journal Q1 2010 17

New Irish legislation will enable offshore fund companies

By Brian McDermott and Nollaig Greene, A&L Goodbody

FROM OuR MEMBERSfroM oUr MeMBers

We encourage all of our Members to contribute to the AIMA Journal. Anyone wishing to do so is invited to contact the Coordinator of the Journal, AIMA Communications Officer Dominic Tonner, at dtonner@aima.org, or the editor, AIMA director of Communications Christen thomson, at cthomson@aima.org. We look forward to hearing from you.

IrIsh oPPortUNItY

to migrate into Ireland

(Continued on page 18)

froM oUr MeMBers

18 AIMA Journal Q1 2010

Introduction

As a result of declining stock prices and increased volatility on the Australian Securities Exchange (ASX), the Australian Securities and Investments Commission (ASIC) placed a

temporary ban on both naked and covered short selling of securities, effective 22 September 20081. The ban was subsequently lifted on non-financial stocks on 19 November 20082, on the condition that brokers report their gross short sale positions to the ASX, which is subsequently released to the public at 9am the following day in the form of a Daily Gross Short Sales Report. Throughout the period of the ban, restricted stocks were shorted as allowed by limited, authorised market-makers. Following numerous reviews of the short selling restrictions, which resulted in maintaining the ban on restricted stocks due to continued market volatility3, ASIC finally lifted the ban on the remaining financial and selected stocks on 25 May 2009.

Australia was one of the few developed countries to have continued to impose short selling restrictions on financial stocks and the only major developed market to have imposed a short selling ban on both financial and non-financial stocks4. The restrictions were placed with limited available evidence on the impact of short selling on stock prices.

The following examines whether, over the period that the ban was partially lifted, there is a relationship between reported short selling and stock price movements. The models developed are intended to be explanatory as opposed to predictive models, designed to explore whether there is any support for the populist argument that short selling has affected stock price declines.

Method

data sample: This study is based on the stocks comprising the S&P/ASX 20 as at 19 November 2008. The S&P/ASX 20 represents the 20 largest stocks by market capitalisation, which as at 19 November 2008 constituted 58% of the All Ordinaries total market capitalisation5. Coincidently, the S&P/ASX 20 represents a 50/50 split of stocks that were released from the provisions of the ban on 19 November 2008 (shortable stocks) and those that remained under the restrictions of the short selling ban until 22 May 2009 (non-shortable stocks). The period covered is from 19 November 2008 to 22 May 2009; a total of 127 observations.

Analysis

To test the null hypothesis of a statistically insignificant relationship between short selling and abnormal stock price movement, a linear regression model is created with the following specifications:

Model 1: daily returnt = α + β (Gross Short Salest) + εt.

Where: Daily Return6 = Daily stock price return adjusted for dividends (the dependent variable);α = Intercept term;β = Sensitivity of Daily Return to Gross Short Sales;Gross Short Sales7 = Daily gross short sales as a percentage of shares on issue (the independent variable);ε = Error term.

The focus of the modelling is the estimated value for β, the sensitivity of a stock’s daily return to gross short sales, using a 5% level of significance.

In order to adjust the stock returns for movements in the overall market, a second linear regression model was created for each using the relative daily return of the stocks (relative daily return) as the dependent variable, calculated as the stock’s daily return (adjusted for dividends) less the daily return on the All Ordinaries Accumulation Index. The independent variable remained the same as in Model 1; the reported gross short sales as a percentage of shares on issue:

We anticipate that the Irish Registrar of Companies will register the migrating fund and the Irish Financial Regulator will authorise the fund on the same day. From the date of registration the migrating fund company shall be deemed to be a company formed under the Irish Companies Acts. Following such registration, the migrated fund must then apply to be deregistered in its country of origin.

By enacting this legislation in a short timeframe, the Irish Government

has once again shown its commitment to the funds industry in Ireland. This development also demonstrates the ability of the funds industry to work with the relevant authorities in Ireland in order to support and assist the delivery of measures which, it is believed, will be responsive to the needs of the international funds community.

Brian McDermott is head of the Investment Funds Unit and Nollaig Greene is professional support lawyer in the Investment Funds Unit, A&L Goodbody.

(Continued from page 17)

Impact on Australian stock prices

By Emily Stewart, Rick Steele, Ashley Young, TechInvest Pty Limited

short seLLING

1 D’Aloisio, T 08-205 Covered Short Selling not Permitted September 21, 2008.

2 Five additional non-financial securities remained subject to the short selling ban: Calliden

Group Limited, Futuris Corporation Limited, The Rock Building Society Limited, Wesfarmers

Limited and Wide Bay Australia Ltd.

3 ASIC Extends Ban on Covered Short Selling of Financial Securities March 5, 2009. See also

Hamson et. al Has the Short Selling Ban Reduced Liquidity in the Australian Stock Market?

December 22, 2008 for analyses on volatility and the short selling restrictions.

4 See Marsh, W & Neimer, N Impact of Short Sales Restrictions on Share Prices November 30,

2008.

5 Figures obtained from IRESS Market Technology database and Standard and Poor’s.

6 Data sourced from IRESS Market Technology (IRESS)

7 Data sourced from the Daily Gross Short Sales report as published on asx.com.au

8 Data sourced from IRESS

froM oUr MeMBers

Model 2: relative daily returnt = α + β (Gross Short Salest) + εt.

Where: Relative Daily Return8 = Daily stock price return adjusted for dividends, less the daily return on the All Ordinaries Accumulation Index (the dependent variable);α = Intercept term;β = Sensitivity of Relative Daily Return to Gross Short Sales;Gross Short Sales = Daily gross short sales as a percentage of shares on issue (the independent variable);ε = Error term.

results

Model 1 produced three statistically significant relationships using a two-tailed test, namely BHP, FGL and TLS. Two of the three stocks, BHP and FGL, had positive gross short sales coefficient estimates,

indicating that share prices increased as gross short sales increased. TLS, however, returned a negative gross short sales coefficient estimate, indicating that prices decreased with an increase in gross short sales. Using a one-tailed test, AMP, NCM and RIO produced a statistically significant relationship. AMP and NCM had positive short sales coefficient estimates, while RIO returned a negative gross short sales coefficient estimate.

Model 2 (turn to page 20), using relative share price returns as the dependent variable, produced statistically significant results using a two-tailed test for BHP and NAB. These stocks returned positive gross short sales coefficient estimates, indicating relative share prices increased as gross short sales increased. In the context of a one-tailed test, MQG returned a statistically significant result, also with a positive gross short sales coefficient estimate.

AIMA Journal Q1 2010 19

table 1: Model 1 resultsShortable stocks (Model 1)

Stock Company name Industry group Gross short sales coefficient R2

(ASX code) estimate (p-value)

BHP BHP Billiton Limited Materials 11.67 (0.041)** 0.03BXB Brambles Limited Commercial & Professional -1.15 (0.856) 0.00 ServicesCSL CSL Limited Pharmaceuticals -0.74 (0.892) 0.00FGL Foster’s Group Limited Food, Beverage, Tobacco 8.70 (0.033)** 0.04NCM Newcrest Mining Limited Materials 8.69 (0.063)* 0.03ORG Origin Energy Limited Energy 5.41 (0.481) 0.00RIO Rio Tinto Limited Materials -6.22 (0.095)* 0.02TLS Telstra Corporation Limited Telecommunications -7.09 (0.045)** 0.03WOW Woolworths Limited Food & Staples -6.14 (0.165) 0.02WPL Woodside Petroleum Limited Energy 9.54 (0.188) 0.01

Non-shortable stocks (Model 1)

Stock Company name Industry group Gross short sales coefficient R2

(ASX code) estimate (p-value) AMP AMP Limited Insurance 17.33 (0.057) * 0.03ANZ Australia and New Zealand Banks 4.47 (0.243) 0.01 Banking Group LimitedCBA Commonwealth Bank Banks -0.77 (0.903) 0.00 of AustraliaMQG Macquarie Group Limited Diversified Financials 15.39 (0.140) 0.02NAB National Australia Bank Ltd Banks 4.69 (0.260) 0.01QBE QBE Insurance Group Limited Insurance 5.81 (0.249) 0.01SUN Suncorp-Metway Limited Insurance 1.89 (0.620) 0.00WBC Westpac Banking Corporation Banks 1.18 (0.710) 0.00WDC Westfield Group Real Estate -6.00 (0.478) 0.00WES Wesfarmers Limited Food & Staples 4.02 (0.126) 0.02

* statistically significant 1-tailed test result

** statistically significant 2-tailed test result

(Continued on page 20)

20 AIMA Journal Q1 2010

froM oUr MeMBers

In summary, only one out of the 20 stocks analysed returned results indicating a statistically significant negative relationship between stock price returns and gross short sales, using a two-tailed test. One out of the 20 stocks analysed returned similar results using a one-tailed test. Where the dependent variable was relative stock price returns, there was no statistically significant negative relationship using either two or one-tailed tests. In both models there were, in fact, more instances of statistically significant positive relationships. This study should encourage further analyses as the results are inconsistent with the conventional wisdom that declining share prices are associated with short selling. The authors are Emily Stewart, Rick Steele, Ashley Young, TechInvest Pty Limited (www.techinvest.com.au).

TechInvest is a member firm of AIMA Australia

Bibliography

Australian Securities and Investment Commission

ASIC Extends Ban on Covered Short Selling of Financial Securities www.asic.gov.au, 5 March 2009

D’Aloisio, T. and ASIC 08-205 Covered Short Selling not Permitted www.asic.gov.au, 21 September 2005

Gardner, P. Hamson, D. Smith, G. and Wanzare, M. Has the Short Selling Ban Reduced Liquidity in the Australian Stock Market? JASSA, The FINSIA Journal of Applied Finance, Issue 4, 2008 pp14-20

Marsh, W. and Neimer, N. The Impact of Short Sales Restrictions 17 December 2008

Standard and Poor’s S&P/ASX All Ordinaries 19 November 2008

(Continued from page 19)

table 2: Model 2 resultsShortable Stocks (Model 2)

Stock Company name Industry group Gross short sales coefficient R2

(ASX code) estimate (p-value) BHP BHP Billiton Limited Materials 8.98 (0.021)** 0.04BXB Brambles Limited Commercial & Professional -0.37 (0.950) 0.00 ServicesCSL CSL Limited Pharmaceuticals -5.56 (0.314) 0.01FGL Foster’s Group Limited Food, Beverage, Tobacco 5.71 (0.193) 0.01NCM Newcrest Mining Limited Materials 7.63 (0.103) 0.02ORG Origin Energy Limited Energy -3.12 (0.672) 0.00RIO Rio Tinto Limited Materials -5.26 (0.103) 0.02TLS Telstra Corporation Limited Telecommunications -6.70 (0.122) 0.02WOW Woolworths Limited Food & Staples -2.40 (0.603) 0.00WPL Woodside Petroleum Limited Energy 6.02 (0.255) 0.01

Non- Shortable Stocks (Model 2)

Stock Company name Industry group Gross short sales coefficient R2

(ASX code) estimate (p-value) AMP AMP Limited Insurance 10.79 (0.165) 0.02ANZ Australia and New Zealand Banking Banks 1.88 (0.507) 0.00 Group LimitedCBA Commonwealth Bank of Australia Banks -0.94 (0.841) 0.00MQG Macquarie Group Limited Diversified Financials 15.92 (0.075)* 0.03NAB National Australia Bank Limited Banks 6.22 (0.039)** 0.03QBE QBE Insurance Group Limited Insurance 0.34 (0.938) 0.00SUN Suncorp-Metway Limited Insurance 2.12 (0.528) 0.00WBC Westpac Banking Corporation Banks -0.11 (0.961) 0.00WDC Westfield Group Real Estate -4.05 (0.587) 0.00WES Wesfarmers Limited Food & Staples 3.24 (0.138) 0.02

* statistically significant 1-tailed test result

** statistically significant 2-tailed test result

AIMA Journal Q1 2010 21

froM oUr MeMBers

Cayman hedge fund sector continues to grow CoUNtrY ProfILe

By Paul Govier, Joint Managing Partner and Head of Investment Funds, Maples and Calder, London

For over 20 years, the Cayman Islands has been a leading jurisdiction for the establishment of hedge funds. But in the wake of the financial crisis, and the subsequent political

backlash and various proposed regulatory reforms for the hedge fund industry, it has been suggested that this position is being challenged. This article analyses the recent statistics for fund launches in the Cayman Islands in order to identify any trend away from Cayman. The results make for interesting reading.

statistics

At the end of December 2007, when the full extent of the credit crunch and political response was yet to be realised, there were 9,413 registered funds in the Cayman Islands. The vast majority of these were hedge funds. Go forward two years, and substitute a nascent economic crisis for a nascent economic recovery and many commentators would have you believe that the landscape has shifted dramatically. Do the statistics bear them out?

According to the statistics available at the time of writing, there are 9,862 investment funds established in the Cayman Islands. In other words, the Cayman Islands has increased its total number of funds by 449 (or 4.6%) since the economic crisis began. During this period, the Cayman Islands has continued to launch in excess of 100 funds per month, with 1,365 new funds being launched during 2008 and 1,150 new funds being launched in 2009.

reasons for trend

The Cayman Islands enjoys a position of dominance by virtue of a combination of good luck and good judgement. Proximity to the USA certainly helped, but the Cayman Islands are by no means alone in being in the right place at the right time. Perhaps more importantly, the Cayman Islands implemented early on a regulatory regime that struck the right balance between flexibility and prudence and then applied an approach of, “if it ain’t broke, don’t fix it”.

The Cayman Islands has also remained cost efficient, having increased its annual fees this year by a small amount; the first increase in over five years. As a result of years of gaining expertise in this field, Cayman is now recognised as possessing vast experience in the hedge fund space which is difficult to replicate elsewhere. The Cayman hedge fund model, based on tax neutrality and professional efficiency, has been reviewed extensively by counsel for managers and investors and is regarded as a tried and tested model; robust enough to withstand the challenge of the credit crisis.

That is not to say that the inertia in favour of the Cayman Islands has not been under pressure; but the offshore hedge fund industry has responded.

Firstly, there has been regulatory pressure. Certain drafts of the now notorious EU AIFM Directive include provisions designed to favour the distribution of EU domiciled funds within Europe - although European investors have lobbied hard to ensure they are not denied

the opportunity of investing in the best offshore hedge funds and it looks likely that existing private placement rules will remain to allow offshore funds to be marketed in the EU. On the other side of the Atlantic, the Obama Administration has introduced legislation designed to attack so called “tax havens”; but the proposed US draft legislation now looks a more proportional response and should not impact the Cayman model. The G20 and the OECD have committed to a global approach to the regulation of hedge funds and harmful tax competition; Cayman has responded by agreeing to tax information exchange agreements with major G20/EU nations. In addition, Cayman has received positive reviews from the IMF and the UK Treasury. Also last year, the Cayman Islands Monetary Authority became a full member of IOSCO - acknowledgement that it is recognised by a number of international bodies as meeting international standards.

There has been investor pressure too. Some risk-averse investors have a preference for conservative strategies better suited to more regulated products, such as UCITS funds. There are also certain investors who, for political reasons, require an EU vehicle in which to invest. But such regulation comes at a cost, restricting investment strategy and leverage flexibility and hampering performance. Conversely, sophisticated investors and innovative managers often prefer the Cayman model which allows for investment strategies which produce better risk adjusted returns. And Cayman embraces transparency – it was the first offshore hedge fund jurisdiction, for example, to introduce know-your-customer and anti-money laundering rules and collect and publish statistical information on its industry.

There has also been domestic pressure. The Cayman Islands, like many other nations, incurred a domestic deficit as a result of the global economic crisis. However, the Cayman Islands acted quickly to address the deficit, cutting expenditure and raising money through innovative and incremental measures that will not impact on its vital offshore industry. It has also implemented initiatives to attract hedge fund managers and other foreign entrepreneurs to establish offices in the Cayman Islands to further bolster the economy into the future.

Finally, most of the pressure felt by the Cayman Islands applies equally to the alternative jurisdictions. All of the offshore jurisdictions, and several onshore ones, have been subject to global pressure on tax reform. Many of the regulatory initiatives will impact on them as well, even the AIFM Directive. And investors have been hurt badly in supposedly highly-regulated onshore jurisdictions.

Conclusions

The choice of domicile for a new hedge fund is perhaps not as obvious as it once was. However, the Cayman Islands continues to be the preferred home for new and existing hedge funds. Investor appetite for regulated products has fuelled an increase in activity in some onshore centres, but on the whole for products that complement, rather than replace, an offshore hedge fund offering. Regulatory developments, particularly within the EU, may well change the landscape in the future. But for now, for most hedge fund managers, the status quo prevails.

22 AIMA Journal Q1 2010

ALter doMUsCountry: Hong KongContact: Javed RahmanTelephone: +852 3579 5858Email: javed.rahman@alterdomus.comBusiness activity: Fund administration, accounting & custody servicesWebsite: www.alterdomus.com

ArGYLe street MANAGeMeNtCountry: Hong KongContact: Angel LoTelephone: +852 2106 0888Email: angel.lo@asmhk.comBusiness activity: Hedge fund manager/adviser

BAteLeUr CAPItALCountry: South AfricaContact: Mark WilliamsTelephone: +27 21 657 2100Email: mark@bateleurcapital.comBusiness activity: Hedge fund manager/adviserWebsite: www.bateleurcapital.com

BLACK CAstLe Asset MANAGeMeNtCountry: SwitzerlandContact: Serge AerneTelephone: +41 71 535 5015Email: s.aerne@black-castle.chBusiness activity: Hedge fund manager/adviserWebsite: www.black-castle.ch

BLACKheAth fUNd MANAGeMeNtCountry: CanadaContact: Jennifer CoghillTelephone: +1 416 363 2962Email: jcoghill@blackheathfundmanagement.comBusiness activity: Hedge fund manager/adviserWebsite: www.blackheathfundmanagement.com

BtIG hoNG KoNGCountry: Hong KongContact: Christian KiellandTelephone: +852 3416 5003

Email: ckielland@btig.com.hkBusiness activity: Other service providersWebsite: www.btig.com

BUtLer INVestMeNt MANAGers Country: UKContact: Lorna NolanTelephone: +44 (0)20 7319 7700Email: lnolan@butler-ig.comBusiness activity: Hedge fund manager/adviser

CAPItAL fUNd MANAGeMeNtCountry: FranceContact: Martin TornqvistTelephone: +33 1 49 49 59 49Email: martin.tornqvist@cfm.frBusiness activity: Hedge fund manager/adviserWebsite: www.cfm.fr

CAVeNAGh CAPItALCountry: SingaporeContact: Andrew GaleTelephone: +65 3125 2200Email: andrew.gale@cavenaghcapital.comBusiness activity: Hedge fund manager/adviserWebsite: www.cavenaghcapital.com

CeNtAUr fUNd serVICesCountry: IrelandContact: Ronan DalyTelephone: +353 1 899 2400Email: ronan.daly@centaurfundservices.comBusiness activity: Fund administration, accounting & custody servicesWebsite: www.centaurfundservices.com

CeNtUrIoN INVestMeNt MANAGeMeNtCountry: SingaporeContact: Brian WongTelephone: +65 6338 3190Email: brianwong@centurion.sgBusiness activity: Hedge fund manager/adviserWebsite: www.centurion-investment.com

ChILtoN INVestMeNt CoMPANYCountry: USAContact: Jennifer DugginsTelephone: +1 203 352 4000Email: jduggins@chiltoninc.comBusiness activity: Hedge fund manager/adviserWebsite: www.chiltonfunds.com

CHINA ASSET MANAGEMENT (HONG KoNG)Country: Hong KongContact: Iris ChenTelephone: +852 3406 8688Email: iris.chen@chinaamc.comBusiness activity: Hedge fund manager/adviserWebsite: www.chinaamc.com

CMs BUreAU frANCIs LefeBVreCountry: FranceContact: Jérôme SutourTelephone: +33 1 47 38 55 00Email: jerome.sutour@cms-bfl.comBusiness activity: Legal servicesWebsite: www.cms-bfl.com

CrYstALLINe MANAGeMeNtCountry: CanadaContact: Jean-Pierre LangevinTelephone: +1 514 284 0248Email: jplangevin@arbitrage-canada.comBusiness activity: Hedge fund manager/adviserWebsite: www.arbitrage-canada.com

CsAM Asset MANAGeMeNtCountry: SingaporeContact: Gabor MarosiTelephone: +65 6823 1531Email: marosi@csamam.com.sgBusiness activity: Hedge fund manager/adviser

dYNAMIC CredIt PArtNersCountry: USAContact: James FinkelTelephone: +1 212 319 7027Email: jfinkel@dynamiccredit.com

NeW MeMBers

Membership of AIMA is corporate, thereby entitling all of your company’s principals to enjoy the many benefits. For further details, please telephone John Stephens on +44 (0)20 7822 8380. Alternatively, you can email John at jstephens@aima.org. We look forward to speaking with you.All information supplied in the following member profiles has been provided by the member company and its accuracy is not guaranteed by AIMA.

New members of AIMA during Q4 2009

AIMA Journal Q1 2010 23

Business activity: Hedge fund manager/adviserWebsite: www.dynamiccredit.com

ELLIOTT ADVISORS (HK) Country: Hong KongContact: Verman WongTelephone: +852 3558 1000Email: vwmwong@elliottadvisors.hkBusiness activity: Hedge fund manager/adviser

eseMPLIA eMerGING MArKetsCountry: UKContact: Jim KanduniasTelephone: +44 (0)20 7858 3000Email: jim@esemplia.comBusiness activity: Hedge fund manager/adviserWebsite: www.esemplia.com

GALILeo CAPItALCountry: SwitzerlandContact: Simon CollardTelephone: +41 22 700 6347Email: sc@galileo-cap.comBusiness activity: Hedge fund manager/adviserWebsite: www.galileo-cap.com

GLOBAL TRADING STRATEGIES (UK)Country: UKContact: Amie ChechkinTelephone: +44 (0)20 7665 6901Email: Amie.chechkin@gtsinvest.comBusiness activity: Other service providersWebsite: www.gtsinvest.com

GLoBAL trAdING strAteGIes INVestMeNt MANAGeMeNtCountry: AustraliaContact: Murray ChatfieldTelephone: +612 9321 8531Email: murray.chatfield@gtsinvest.comBusiness activity: Hedge fund manager/adviserWebsite: www.gtsinvest.com

GoodhArt PArtNersCountry: UKContact: Peter TaylorTelephone: +44 (0)20 7016 6080Email: ptaylor@goodhartpartners.comBusiness activity: Allocator managerWebsite: www.goodhartpartners.com

hAdroN CAPItALCountry: UKContact: Giorgia PozzoliTelephone: +44 (0)20 7469 5900

Email: gp@hadroncapital.comBusiness activity: Hedge fund manager/adviser

hersCheL Asset MANAGeMeNtCountry: AustraliaContact: Mark BurgessTelephone: +61 3 9631 4855Email: mark.burgess@herschel.comBusiness activity: Hedge fund manager/adviserWebsite: www.herschel.com

hILLtoP fUNd MANAGeMeNtCountry: UKContact: Rory HillsTelephone: +44 (0)20 7788 7799Email: rory.hills@hilltop.co.ukBusiness activity: Hedge fund manager/adviserWebsite: www.hilltop.co.uk

INfINItY CAPItAL PArtNersCountry: USAContact: Sarah WildeTelephone: +1 678 904 6301Email: swilde@infinityfunds.comBusiness activity: Allocator managerWebsite: www.infinityfunds.com

JAMes CAIrd Asset MANAGeMeNtCountry: UKContact: Amy WardTelephone: +44 (0)20 7073 2100Email: amy.ward@jcam.comBusiness activity: Hedge fund manager/adviserWebsite: www.jcam.com

KINGstoN sMIth CoNsULtINGCountry: UKContact: David MorreyTelephone: +44 (0)20 7566 4000Email: dmorrey@kscllp.co.ukBusiness activity: Consultant (compliance)Website: www.kscllp.co.uk

KIs CAPItAL PArtNers Country: AustraliaContact: Mark McGuireTelephone: +612 8227 7100Email: mark.mcguire@kiscapital.comBusiness activity: Hedge fund manager/adviserWebsite: www.kiscapital.com

LoWeNsteIN sANdLerCountry: USAContact: Jordana SilversteinTelephone: +1 212 262 6700

Email: jsilverstein@lowenstein.comBusiness activity: Legal servicesWebsite: www.lowenstein.com

MACINtYre hUdsoNCountry: UKContact: Chris SuttonTelephone: +44 (0)20 7429 4100Email: chris.sutton@mhllp.co.ukBusiness activity: Accounting, audit, tax & related servicesWebsite: www.macintyrehudson.co.uk

MACroVALUe INVestorsCountry: Hong KongContact: Satoko IsobeTelephone: +852 2523 9577Email: satoko.isobe@macrovalue.comBusiness activity: Hedge fund manager/adviserWebsite: www.macrovalue.com

MAMo tCV AdVoCAtesCountry: MaltaContact: Joseph SalibaTelephone: +356 21 231 345Email: joseph.saliba@mamotcv.comBusiness activity: Legal servicesWebsite: www.mamotcv.com

ML CAPItAL GroUPCountry: MaltaContact: Ronnie TantiTelephone: +356 213 348 01Email: ronnie@mlcapital.comBusiness activity: Consultant (investment)Website: www.mlcapital.com

Moore MANAGeMeNtCountry: Jersey, Channel Is.Contact: Patricia RemondTelephone: +44 (0)1534 822 500Email: patricia.redmond@mooregroupltd.comBusiness activity: Fund administration, accounting & custody servicesWebsite: www.mooremanagement.com

oPVs GroUP Country: SingaporeContact: Nicholas LohTelephone: +65 6577 3177Email: nicholas.loh@opvsgroup.comBusiness activity: Hedge fund manager/adviserWebsite: www.opvsgroup.com

NeW MeMBers

(Continued on page 24)

orYX INVestMeNt MANAGeMeNtCountry: South AfricaContact: John VersfeldTelephone: +27 21 673 5900Email: john@oryxim.co.zaBusiness activity: Hedge fund manager/adviserWebsite: www.oryxim.co.za

PANdA GLoBAL AdVIsorsCountry: USAContact: Hans HaywoodTelephone: +1 212 257 6745Email: hans.haywood@pandaglobaladvisors.comBusiness activity: Manager/advisor otherWebsite: www.pandaglobaladvisors.com

PAUL, hAstINGs, JANofsKY & WALKER (EUROPE) Country: UKContact: Christian ParkerTelephone: +44 (0)20 3023 5100Email: christianparker@paulhastings.comBusiness activity: Legal servicesWebsite: www.paulhastings.com

PVe CAPItALCountry: UKContact: Joseph VittoriaTelephone: +44 (0)20 3206 7374Email: jv@pvecapital.comBusiness activity: Hedge fund manager/adviser

QBAsIs fUNd MANAGeMeNtCountry: Cayman IslandsContact: Michael KuehnTelephone: +1 345 926 7265Email: michael.kuehn@qbasisfund.comBusiness activity: Hedge fund manager/adviser

QUANtUM GLoBAL fINANCIAL CorPCountry: CanadaContact: Michele VincentiTelephone: +1 250 588 6828Email: mvincenti@quantumglobalfinancial.comBusiness activity: Hedge fund manager/adviser

Website: www.quantumglobalfinancial.com

rAtIoNAL Asset MANAGeMeNtCountry: USAContact: Danilo SantiagoTelephone: +1 646 652 8707Email: dsantiago@rationalasset.comBusiness activity: Hedge fund manager/adviserWebsite: www.rationalasset.com

sAM CAPItALCountry: UKContact: Dietmar SchmittTelephone: +44 (0)20 7427 0740Email: dschmitt@samcapital.comBusiness activity: Hedge fund manager/adviserWebsite: www.samcapital.com

sKANdINAVIsKA eNsKILdA BANKeN AB (PUBL) LONDON BRANCHCountry: UKContact: Magnus WardTelephone: +44 (0)20 7246 4285Email: magnus.ward@seb.co.ukBusiness activity: Prime brokerage servicesWebsite: www.seb.se

stAtIstICAL reseArCh LABorAtorYCountry: UKContact: Dominic Wells-ColeTelephone: +44 (0)20 3170 7775Email: dominic.wells-cole@srlglobal.comBusiness activity: Fund administration, accounting & custody servicesWebsite: www.managedaccountplatform.com

tANNeNBAUM heLPerN sYrACUse & hIrsChtrIttCountry: USAContact: Michael TannenbaumTelephone: +1 212 508 6700Email: tannenbaum@thshlaw.comBusiness activity: Legal servicesWebsite: www.thshlaw.com

thIrd PoINtCountry: USAContact: Marc ZwebnerTelephone: +1 212 224 7400Email: mzwebner@thirdpoint.comBusiness activity: Hedge fund manager/adviserWebsite: www.thirdpoint.com

tIMothY Loh soLICItorsCountry: Hong KongContact: Henri ArslanianTelephone: +852 2899 0190Email: harslanian@timothyloh.comBusiness activity: Legal servicesWebsite: www.timothyloh.com

trIPLe three PArtNersCountry: AustraliaContact: Simon HoTelephone: +61 2 9967 9778Email: sho@triple3p.comBusiness activity: Hedge fund manager/adviserWebsite: www.triple3p.com

TT INTERNATIONAL (HONG KONG) Country: Hong KongContact: Quentin BurrowsTelephone: +852 3476 6000Email: burrowsq@ttint.comBusiness activity: Hedge fund manager/adviser

WAdhWANI Asset MANAGeMeNtCountry: UKContact: Pradip DasaniTelephone: +44 (0)20 7663 3400Email: pradipd@waniasset.comBusiness activity: Hedge fund manager/adviser

WIthers BVICountry: British Virgin IslandsContact: John GreenwoodTelephone: +1 284 494 4949Email: john.greenwood@withersworldwide.comBusiness activity: Legal servicesWebsite: www.withersworldwide.com

24 AIMA Journal Q1 2010

NeW MeMBers

ContactThe Alternative Investment Management Association Ltd,2nd Floor, 167 Fleet Street, London EC4A 2EATel: +44 (0)20 7822 8380 Email: info@aima.orgRegistered in England and Wales at the above address. Company No. 4437037 – VAT No. 577 5913 90

(Continued from page 23)