News & Events Archive

Archive Year
August 2018

The Eurekahedge Report - August 2018

Eurekahedge

The benchmark Eurekahedge Hedge Fund Index was up 0.41% in July, up 0.43% year-to-date. Total assets under management increased by US$3.4 billion during the month as the sector witnessed performance-based increase of US$2.0 billion while registering net asset inflows of US$1.5 billion. The total size of the industry now stands at US$2.46 trillion.


Asset Flows Update

Eurekahedge

The Eurekahedge Hedge Fund Index was up 0.41% in July while underlying markets as represented by the MSCI World Index gained 2.59% over the same period. Regional mandates with the exception of underlying Asia focused hedge funds ended the month in the green. Asia focused strategies saw yet another month of decline as recovery in the US coupled with concerns over the US China trade war kept the pressure up on Asian markets. Across strategies, distressed debt and fixed income hedge funds led the table with gains of 0.76% each whilst CTA/managed futures hedge funds posted yet another month of losses.


Hedge Fund Performance Commentary

Eurekahedge

The Eurekahedge Hedge Fund Index ended the month of July up 0.41% as North American and European equity markets enjoyed the boost from strong second quarter earnings season, which somewhat mitigated losses incurred by the global trade friction. Roughly 13% of hedge fund managers tracked by Eurekahedge managed to outperform the underlying global equity markets as represented by the MSCI AC World Index (Local) which gained 2.59% over the month. On a year-to-date basis, the Eurekahedge Hedge Fund Index was up 0.43% as of July 2018.


The consistently consistent: trade finance hedge funds maintain their winning edge amidst the trade war

Eurekahedge

Despite the escalation of the ongoing trade conflict between the US and China, trade finance hedge funds successfully traded their way around this challenge over the past few months. The Eurekahedge Trade Finance Hedge Fund Index has not spent a single month in the red since the year started, and has returned 3.51% as of July 2018 year-to-date, ahead of hedge fund managers utilising fixed income strategies as represented by the Eurekahedge Fixed Income Hedge Fund Index which gained 1.16% over the same period. The custom index, an equal weighted index composite of 26 unique trade finance hedge funds tracks US$3.7 billion in assets under management (AUM) as of July 2018, a figure which has surged more than 50% since the end of 2016.


2018 Key Trends in Global Hedge Funds

Eurekahedge

The Eurekahedge Hedge Fund Index gained 0.02% as of June 2018 year-to-date, showing its worst 1H performance since 1999. The global economy is at risk due to the escalating tension of trade war between the US and China, which started in January 2018 when the US president Donald Trump imposed a tariff on imported solar panels and washing machines. The tension arose when president Trump imposed further tariffs on US$50 billion’s worth of Chinese goods and threatened to implement the same tariffs on an additional US$200 billion of goods imported from the world’s second largest economy. According to the International Monetary Fund chief economist Maurice Obstfeld, the ongoing trade war is a near-term threat to global growth.


Global Hedge Funds Infographic August 2018

Eurekahedge

Eurekahedge’s global hedge funds infographic sums up the industry as at August 2018. Find out more about global hedge funds assets under management (AUM), asset flows into strategic and regional mandates, strategy returns, fund size and geographic AUM, head office locations and the best and worst performances of the year.


Blockchain Investment Funds - A Perspective from Cayman

Gaela R. Fitzgibbons, Higgs & Johnson Counsel & Attorneys at Law

In regard to the structure, set up and launch of innovative investment fund structures with specialization in investments in blockchain, ICO and cryptocurrency assets, this article includes a pragmatic list of fifty considerations and frequently asked questions for those interested in setting up a Cayman investment fund to invest into these asset classes.


Emerging Trends in Co-Investing Alongside Funds in Asia

Suzanne Gibson and Chi Ha, King & Wood Mallesons

Offering co-investment opportunities to certain fund investors is a key trend for fund sponsors in establishing alternative investment funds.


ILS Funds in Guernsey

Christopher Anderson, Carey Olsen

Guernsey has a thriving insurance linked securities (ILS) sector. As described in Carey Olsen's ILS briefing , Guernsey is home to an abundance of ILS structures


The Financial Council: Consultation on the Wates Corporate Governance Principles for Large Private Companies

Andrew Collins and Amelly Kok, Charles Russell Speechlys LLP

On 13 June 2018, the Financial Reporting Council (FRC) published a consultation on corporate governance principles for large private companies (the Principles) and supporting guidance. The Principles are a voluntary set of corporate governance principles for large private companies developed by the Coalition Group, an industry group chaired by James Wates CBE (of family-business, Wates Group) and constituted by representatives from the FRC and various industry bodies including the British Private Equity & Venture Capital Association, the Confederation of British Industry, the Institute of Directors and the Trades Union Congress.


Offering Exemptions Available to Companies Issuing ICOs

Jennifer A. Connors, Josias N Dewey, Rebecca Leon and David P. Sofge, Holland & Knight LLP

Issuing an initial coin offering (ICO) is a new and innovative way for companies to infuse capital into their enterprise. However, several regulatory agencies have increased their scrutiny of ICOs, including the U.S. Securities and Exchange Commission (SEC).


Turkish Treasury to Invest in Venture Capital Funds

Muhsin Keskin and Sait Baha Erol, Esin Attorney Partnership

The Council of Ministers' decision no. 2018/11662, published in the Official Gazette on 5 June 2018, paved the way for the Undersecretariat of Treasury ("Treasury") to invest in venture capital funds ("funds").


US Cross-Border Securities: Buyer (and Seller) Beware

Kenneth Juster, White & Case LLP

As technology removes physical borders from the securities industry, international financial institutions must remain vigilant to ensure their business activities do not violate US regulations.


July 2018

The Eurekahedge Report - July 2018

Eurekahedge

The benchmark Eurekahedge Hedge Fund Index was down 0.34% in June, up 0.08% year-to-date. Total assets under management decreased by US$3.8 billion during the month as the sector witnessed performance-based decrease of US$2.4 billion while registering net asset outflows of US$1.3 billion. The total size of the industry now stands at US$2.46 trillion.


Asset Flows Update

Eurekahedge

The Eurekahedge Hedge Fund Index was down 0.34% in June while underlying markets as represented by the MSCI World Index declined 0.21% over the same period. Regional mandates across the board with the exception of Australia/New Zealand mandated hedge funds ended the month in the red, with emerging markets, in particular Asia-focused strategies seeing the largest declines. Across strategies, event driven hedge funds led the table with gains of 1.17% followed by relative value hedge funds which were up 0.66%.


Hedge Fund Performance Commentary

Eurekahedge

The Eurekahedge Hedge Fund Index slumped 0.34% during the month of June, as managers struggled under the volatile market situation driven by the escalating US-China tariff spat over the month. The transitory ceasefire in the trade war was effectively ended when the White House announced a 25% tariff on US$50 billion of Chinese exports on June 15, which prompted China to respond in kind. Roughly 46% of the hedge fund managers tracked by Eurekahedge managed to outperform the underlying global equity markets as represented by the MSCI AC World Index (Local) which declined 0.21% over the month. The Eurekahedge Hedge Fund Index wrapped the first half of 2018 with a positive yet unremarkable return of 0.08% after spending three months in the red, a far cry from the 3.36% gain posted by the index over the first half of 2017.


The hedge fund ESG experience: the rise of conscientious and responsible alternative investing

Eurekahedge

Investors are increasingly beginning to incorporate ethical considerations into their investment decisions, a development which has given rise to the ESG framework over the years. Despite the implementation challenges which arise when screening investments against acceptable environmental, social and corporate governance themes, the trend towards a more conscientious approach to investment is here to stay, especially from the perspective of large institutional investors. Fund managers, for both actively and passively managed investment vehicles are balancing their quest for superior returns with the need to meet investor demand for responsible investing. Further, an understanding that such an approach to investment can translate into ‘ESG induced alpha’ for managers is further helping the cause of ethically guided investing. This article looks at the performance of funds, both long-only absolute return vehicles and hedge funds, with an active ESG investment framework and how they have


2018 Key Trends in European Hedge Funds

Eurekahedge

The Eurekahedge European Hedge Fund Index gained 0.56% in the first half of 2018, ahead of their global peers’ performance as indicated by the Eurekahedge Hedge Fund Index which was up 0.39% over the same period. European hedge funds returned 7.10% in 2017 on the back of the underlying equity markets’ rally throughout the year, supported by strengthening oil and commodity prices, combined with the unwinding of geopolitical risks within the region. Going into 2018, market volatilities returned and weighed down on the alternative investment industry’s performance. Regional risk outlook seemed to be tilted downward as trade concerns over the steel and aluminium tariffs imposed by the Trump administration and the uncertainties looming over Brexit deals may pose as headwinds against the European economies for the upcoming months.


2018 Key Trends in Long-Only Absolute Return Funds

Eurekahedge

Absolute return funds ended the year 2017 with an impressive gain of 20.44%, beating their hedge fund and fund of hedge fund peers which returned 8.19% and 7.18% respectively, by riding on the global equity market rally which propelled the MSCI AC World IMI Index (Local) to rise 17.51% throughout the year. However, market volatilities struck back in the first half of 2018, and absolute return fund managers were down 0.39% as of May 2018 year-to-date, trailing behind hedge fund managers who returned 0.39% over the same period, owing to the downside protection provided by their hedging strategies.


European Hedge Funds Infographic July 2018

Eurekahedge

Eurekahedge’s European hedge funds infographic sums up the industry as at July 2018. Find out more about European hedge funds assets under management (AUM), asset flows into strategic and regional mandates, strategy returns, fund size and geographic AUM, head office locations and the best and worst performances of the year.


Interview with Manuel Anguita, CFA, Co-Founder of Silver 8

Eurekahedge

Manuel Anguita is the co-founder of Silver 8, a US-based fund focused on financial technology. Silver 8 was the ranked in the Top 1% of hedge funds globally based on AY 2017 returns and in the Top 15 hedge funds based on annualised returns since inception (Eurekahedge). Silver 8 is one of the pioneer institutional investors in blockchain technology and digital assets.


Developments in the UK Venture Capital Tax Relief Regimes

Rob Young and Will Egan, Taylor Wessing

The UK has a well-established suite of reliefs designed to incentivise equity investment in companies in the early stages of their existence. This article focuses on developments in these venture capital schemes, particularly the Enterprise Investment Scheme (EIS), the Seed Enterprise Investment Scheme (SEIS) and Venture Capital Trust regime (VCTs) and recent trends and developments, with a particular focus on the changes introduced in the Finance Act 2018.


Income Tax Planning for Investment Management Expenses via a Family Office

Gary M. Kirk, Lane Powell PC

The Federal tax legislation enacted in December 2017 contained many changes that affect high net worth families and their investment and business activities. One change was to prohibit an individual’s deduction for miscellaneous itemised deductions that we have discussed in a prior article . Brief recap: miscellaneous itemised deductions consist of a hodgepodge of unrelated itemised deductions.


Latest Department of Labor Guidance on Economically Targeted Investments and Shareholder Engagement: Requires Plan Fiduciaries to Step Carefully

David M. Glaser, Bernard F. O’Hare, Douglas L. Tang and Jessica S. Carter, Patterson Belknap Webb & Tyler LLP

In late April, the Department of Labor (“DOL”) released FAB 2018-01 addressing and clarifying previous guidance concerning economically targeted investments (“ETIs”), shareholder engagement and proxy voting


On the EMIR Compromise: Reflections and Preliminary Considerations

Eduardo Barrachina, White & Case LLP

Currently under EMIR the clearing obligation only ceases to apply if a NFC+ no longer exceeds the relevant clearing threshold for a period of 30 working days.


President Signs Dodd-Frank Reform Legislation

Mark S. Bergman, David S. Huntington, Brian M. Janson, Raphael M. Russo and Hank Michael, Paul, Weiss, Rifkind, Wharton & Garrison LLP

On May 24, following passage in both the House and Senate earlier this year, President Trump signed into law a financial services reform bill relaxing certain elements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”). The bill, titled the “Economic Growth, Regulatory Relief, and Consumer Protection Act" (the “Act”), limits the application of various provisions of Dodd-Frank to small and mid-sized banks and raises asset thresholds above which larger banks are subject to increased oversight and regulation. The Act also amends certain other provisions of the federal securities laws. Unlike earlier proposed legislation seeking a comprehensive re-working of Dodd-Frank, such as the Financial CHOICE Act (see memorandum on the proposed legislation here), the Act preserves the basic structure of Dodd-Frank while making various targeted adjustments.


Proposed Revisions to the Volcker Rule—Prohibitions and Restrictions on Proprietary Trading and Certain Interests in, and Relationships with, Hedge Funds and Private Equity Funds

Mark V. Nuccio and Gideon Blatt, Ropes & Gray

On May 30, 2018, the Federal Reserve Board issued a notice of proposed rulemaking and asked for comment on a proposed rule to simplify and tailor compliance requirements relating to the regulation implementing section 13 (commonly known as the “Volcker Rule”) of the Bank Holding Company Act (“BHC Act”) (the “Proposal”). The Proposal was developed jointly with the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, and the Commodity Futures Trading Commission (together, the “Agencies”).


June 2018

The Eurekahedge Report - June 2018

Eurekahedge

The benchmark Eurekahedge Hedge Fund Index was up 0.33% in May and 0.48% year-to-date. Total assets under management (AUM) decreased by US$8.8 billion during the month as the sector witnessed performance-based decrease of US$3.6 billion while registering net asset outflows of US$5.2 billion. The total size of the industry now stands at US$2.47 trillion.


Asset Flows Update

Eurekahedge

The Eurekahedge Hedge Fund Index gained 0.33% in May while underlying markets as represented by the MSCI World Index were up 0.84% over the same period. Among regional mandates, North American managers posted the best gains, up 1.43% during the month followed by Asia ex-Japan hedge funds which saw gains of 1.26%. Across strategies, event driven hedge funds led the table with gains of 1.69% followed by long/short equities hedge funds which were up 1.09%.


Hedge Fund Performance Commentary

Eurekahedge

Hedge fund managers successfully remained in the positive territory over the month of May, with the Eurekahedge Hedge Fund Index up 0.33% over the month, supported by the recovery of the global equity markets as represented by the MSCI AC World Index All Cap (Local) which gained 0.84%. Concerns over the trade war between the US and China, as well as geopolitical risks over the Korean peninsula dwindled nearing the end of the month, as the involved parties exhibited amiable dispositions. The armistice in the middle of the US-China tariff war and the results of the Trump-Kim summit held in Singapore in early June might provide a much needed relief for the East Asian equity markets which have been struggling since the start of the year.


Another Atlantic hurricane season looms over the ILS industry

Eurekahedge

The Eurekahedge ILS Advisers Index ended 2017 down 5.60%, breaking the streak of positive returns that lasted for five years, owing to the devastating losses incurred during the Atlantic hurricane season of 2017. The index, which tracks the performance of 34 ILS hedge funds with predominantly non-life risk exposure, declined by 8.61% in the month of September 2017 alone, as the extent of damage caused by hurricane Harvey and hurricane Irma started to come into light. Going into 2018, the index barely budged from its position as at the end of 2017, as it returned 0.07% over the first four months of 2018. Performance across fund managers were mixed, with strong primary cat bond market activities and healthy net inflows providing supports for them, while increased estimations on the losses induced by last year’s Atlantic hurricanes and California wildfire counteracted the gains. However, above-average activity forecasts for the 2018 Atlantic hurricane season may put pressure on ILS fund m


2018 Key Trends in Global Funds of Hedge Funds

Eurekahedge

Total assets managed by funds of hedge funds managers around the globe stood at US$397.5 billion as of April 2018. This continued the trend of contraction which has persisted since the end of 2010 despite the strong performance of multi-manager funds in 2017, as indicated by the 7.19% gain posted by the Eurekahedge Fund of Funds Index. The industry saw 24 launches and 193 closures last year, marking 2017 as the seventh consecutive year of population decline. Investor interest in the fund of hedge funds remained unsubstantial, with net redemptions and fund liquidations persisting as the recurring themes of the industry.


Global Funds of Hedge Funds Infographic June 2018

Eurekahedge

Eurekahedge’s global funds of hedge funds infographic sums up the industry as at June 2018. Find out more about global funds of hedge funds assets under management (AUM), asset flows into strategic and regional mandates, strategy returns, fund size and geographic AUM, head office locations and the best and worst performances of the year.


Canadian Liquid Alternatives: The Next Market Disruptor

Michael Ginelli, Alexandra Krystal and Robert Lemon, CIBC Capital Markets

The Canadian mutual fund market, like the markets for European Alternative UCITS, and US ’40 Act Liquid Alts before it, is on the verge of historic change with proposed amendments to National Instrument 81-102 (the “Proposal”), which introduces a framework for offering greater choice to retail investors. This innovation is an extremely positive outcome for all participants, and should the proposals put forth by the Canadian Securities Administrators (“CSA”) be adopted, strategies, that were not readily accessible to retail investors will become available.


Cryptocurrency Pre-ICO Funding – A Regulatory Overview

James Kaufmann, RPC

Launching a cryptocurrency typically involves an initial fundraising process followed by a public sale process, by way of initial coin offering or token sale (“ICO”). In addition to providing the means to the issuer to pursue initial development, offset development costs and fund future projects, an ICO allows a large pool of interested parties to buy (and subsequently trade) the new cryptocurrency. Creation of a diversified and sufficiently large pool of cryptocurrency holders is key to creating an interest and market for the newly launched cryptocurrency. However, in order to reach the ICO, pre-ICO fundraising may also be required. This is where proceeds of pre-ICO fundraising will be used to pay for the final development steps and for it to operate successfully on a cryptocurrency exchange. Pre-ICO fundraising should also help ascertain (and generate) interest prior to the ICO.


Legislation Creating Opportunity Zones Offers Significant Tax Benefits — an Overview

John G. Balboni, Joseph B. Darby III, John W. Gahan III, Karen J. Kepler, Deirdre M. Robinson and Daniel P. Ryan, Sullivan & Worcester

Recent federal tax legislation introduced "Opportunity Zones," a new community reinvestment tool designed to use tax incentives to drive long-term investment to rural and low-income urban communities throughout the nation. The Opportunity Zone program is the first new national community investment program in over 15 years and has the potential to be the largest economic development program in the U.S. This broad legislation will benefit many stakeholders from individual taxpayers to developers and fund sponsors.


New US Sanctions against Russia Create Unique Issues for Fund Investors

Kenneth J. Nunnenkamp, Giovanna M. Cinelli and Katelyn M. Hilferty, Morgan Lewis

The Office of Foreign Assets Control recently designated 7 “oligarchs,” 17 government officials, 13 companies, and one bank, all Russian, as Specially Designated Nationals (SDNs), effectively prohibiting US persons (individuals and entities) from any dealings with these SDNs, as well as with entities with 50% or more SDN ownership. Fund investors should be proactive in identifying holdings in blocked entities to avoid inadvertently ending up with interests in blocked assets and the accompanying reporting requirements.


The Future of Luxembourg Investment Funds in the Next Decade

Dr. Sebastiaan Hooghiemstra, NautaDutilh

The fund industry is permanently evolving, but incremental changes are hardly noticed. Sometimes however, industries undergo radical changes, where the process of evolution is significantly disrupted by outside technological, demographic, regulatory, and economic forces.


May 2018

Press Release: Red Cliff Asia Fund crowned Best Asian Hedge Fund of 2017 at latest Eurekahedge Asian Hedge Fund Awards

Eurekahedge

SINGAPORE (MAY 28, 2018) – The 15th annual Eurekahedge Asian Hedge Fund Awards ceremony took place on 25 May 2018 with a crowd of 230 attendees coming together to celebrate the 83 best performing Asian hedge funds of 2017. The Best Asian Hedge Fund award went to Red Cliff Asia Fund – the only category in which they were nominated.


Press Release: Investors look to alternatives as Abenomics loses steam - Eurekahedge Japanese Investor Survey

Eurekahedge

For the 5th year running, Eurekahedge conducted the annual survey of Japanese investors with mandates to invest in Japan. The survey itself was conducted in April 2018 to gauge important insights into market sentiment, investment trends and key regulatory challenges facing the Asian asset management industry, with a particular emphasis on the outlook for Japan.


The Eurekahedge Report - May 2018

Eurekahedge

The benchmark Eurekahedge Hedge Fund Index was up 0.56%1 in April, while the MSCI World Index2 was up 1.18% over the month. Total assets under management decreased by US$1.9 billion during the month as the sector witnessed a performance-based increase of US$1.5 billion while registering net asset outflows of US$3.4 billion. The total size of the industry now stands at US$2.48 trillion.


Asset Flows Update

Eurekahedge

The Eurekahedge Hedge Fund Index gained 0.55% in April while underlying markets as represented by the MSCI World Index was up 1.18% over the same period. Among regional mandates, European managers posted the best gains, up 0.78% during the month followed by North American hedge funds which saw gains of 0.27%. Across strategies, distressed debt hedge funds led the table with gains of 1.12% followed by macro hedge funds with 0.84%.


Hedge Fund Performance Commentary

Eurekahedge

Hedge funds successfully traded their way around an overwhelming month in April and were up 0.55% while underlying markets as represented by the MSCI World Index (Local) gained 1.18% during the month. Investors' risk appetite improved in April amid waning concerns over trade war, bolstered by the ‘soft’ tone of Xi Jinping in response to US trade sanctions. Developed markets outperformed their emerging market counterparts during the month, as the latter still remained rather volatile with the region’s equity markets posting a slightly negative return during the month on the back of a strengthening US dollar and concerns over US-China trade spat. Equity markets rebounded in April with strength led by European and North American markets with mixed to flat performance across Asian equity markets. Economic data for Q1 2018 was largely encouraging albeit recovery was at a slower pace with indicators pointing towards global economic expansion. Meanwhile, 58% of the underlying constituent fund


Greater China Equity Hedge Funds: Market Volatility Strikes Back

Eurekahedge

Greater China equity hedge funds ended 2017 with their best annual performance on record since 2009, supported by the remarkable rally of the Chinese equity markets throughout the year. The Eurekahedge Greater China Long Short Equities Hedge Fund Index which tracks 59 Greater China focused hedge funds utilising equity strategies posted a 31.87% gain in 2017, outperforming equity hedge fund managers from the broader region, as represented by the 19.73% return generated by the Eurekahedge Asia Long Short Equities Hedge Fund Index over the same period.


2018 Key Trends in Latin American Hedge Funds

Eurekahedge

The Eurekahedge Latin American Hedge Fund Index was up 5.06% as of March 2018 year-to-date, narrowly outperforming the underlying equity market as represented by the MSCI EM Latin America IMI Index which gained 4.76% over the same period. Latin American hedge fund managers continued to ride on their momentum from last year’s rally despite the difficult trading situations in the first quarter of 2018 which led to the poor performance of the global hedge fund managers who lost 0.30% on average in the quarter. Robust labour market and strengthening private consumption, combined with healthy commodity exports are expected to provide support for the region’s economies, while on the other hand protectionist policies in the United States and political uncertainties induced by the upcoming elections in Brazil, Colombia and Venezuela are among the major downside risks for investors looking into Latin America.


Latin American Hedge Funds Infographic May 2018

Eurekahedge

Eurekahedge’s Latin American hedge funds infographic sums up the industry as at May 2018. Find out more about Latin American hedge funds assets under management (AUM), asset flows into strategic and regional mandates, strategy returns, fund size and geographic AUM, head office locations and the best and worst performances of the year.


Asset Management Market Study Update

James Kaufmann and William Jones, RPC

The latest proposals are designed to "ensure fund managers compete on the value they deliver" and act in the interests of investors (see our thought leadership piece).


How a Change in Strategy Is Putting Cayman on the Map for Japanese Institutional Investors

Joanne Huckle and Kate Hodson, Ogier

As offshore funds counsel in the Cayman Islands, it may come as no surprise that, for me, 2017 has seen a distinct rise in requests to establish bespoke private equity and real estate funds for US managers and sponsors who have been successful in attracting investments from large Japanese institutional investors.


New Islamic Banking Regulations to Increase Financial Inclusion in Uganda

Bernard Katureebe and Birungi Kaburara, ENSafrica

The Bank of Uganda recently released the Financial Institutions (Islamic Banking) Regulations (the “Regulations”), which were gazetted on 2 February 2018. The Regulations seek to operationalise Islamic banking in the country, which was introduced by The Financial Institutions (Amendment) Act, 2016 as part of its wider efforts to boost financial inclusion. With this development, Uganda joins several African countries that have sought to develop the sector to expand financial access and inclusion among rural communities.


Private Equity and Hedge Funds in Puerto Rico - a Welcoming Environment in the Caribbean

Nikos Buxeda, Manuel López-Zambrana, Camille Alvarez and Juan Carlos Feliciano, DLA Piper

Ten years ago, private equity funds and hedge funds were practically nonexistent in Puerto Rico. This has changed dramatically as the result of two main developments: the enactment of Act 185-2014, known as the Private Equity Funds Act and (ii) the influx of financial industry professionals moving to the island to take advantage of the tax benefits available under Acts 20 and 22 (for a more detailed discussion of those benefits, please see Puerto Rico's Act 20 and Act 22 – key tax benefits).


So You Want to Start a Cryptofund? Contemplating Risk Factors to Include in Your Private Placement Memorandum?

Evan A. Kirkham, Carrington Coleman

With 2017 (“The Year of Crypto”) in the rearview, business owners, financial advisors, estate planners, legislators, and any individual in regular contact with a millennial is likely asking this progression of questions: “What is Bitcoin? Is it a fraud? How can I invest in cryptocurrencies? How can I invest other people’s money in cryptocurrencies?” This article will largely focus on the final question, paying particular attention to unique risk factors that should be included in a cryptofund’s Private Placement Memorandum.


April 2018

The Eurekahedge Report - April 2018

Eurekahedge

The benchmark Eurekahedge Hedge Fund Index was down 0.54% in March, while the MSCI World Index was down 2.21% over the month. Total assets under management decreased by US$3.1 billion during the month as the sector witnessed performance-based decrease of US$1.3 billion while registering net asset outflows of US$1.7 billion. The total size of the industry now stands at US$2.48 trillion.


Asset Flows Update

Eurekahedge

The Eurekahedge Hedge Fund Index declined 0.54% in March while underlying markets as represented by the MSCI World Index declined 2.21% over the same period. Among regional mandates, Latin American managers posted the best gains, up 0.81% while all other regional mandates languished into negative territory. Across strategies, distressed debt hedge funds led the table with gains of 5.74% followed by relative value hedge funds which were up 0.31%.


Hedge Fund Performance Commentary

Eurekahedge

Hedge funds registered their second consecutive month of losses since the start of the year, with the Eurekahedge Hedge Fund Index declining 0.54% in March, while still outperforming the MSCI World Index which ended the month down 2.21%. The average return of the global hedge fund was pulled into negative territory in March as choppy trading conditions across commodities, and weaker global equity performance continued to affect the trading scene. March was marked by investors’ concerns over the US and China trade war which made headlines throughout the month and negatively affected the global equity markets, most of which ended the month in the red. As of Q1 2018, hedge funds are down 0.13%, ahead of underlying markets as the MSCI World Index posted losses of 2.24%. Close to 55% of managers were in positive territory, and roughly 6% posted year-to-date returns in excess of 10% over the first quarter. Latin American managers led among regional mandates this month with their 0.81% gain,


Indian Hedge Funds: Good Returns, Mediocre Alpha?

Eurekahedge

Indian hedge funds outperformed their global peers by a large margin in 2017, riding on the back of the Indian equity market’s exceptional performance over the year. The Eurekahedge India Hedge Fund Index generated 28.96% return over 2017, dwarfing the 8.25% return posted by the Eurekahedge Hedge Fund Index over the same period, which also happened to be the best annual performance of the global hedge fund industry since 2013. However, most of those gains were generated through exposure toward the fast growing equity market of the country, raising the question of whether some of these hedge fund managers actually generate enough alpha for their investors to justify their management and performance fees.


2017 Overview: Key Trend in Asian Hedge Funds

Eurekahedge

Asian hedge funds ended 2017 with their strongest performance recorded since 2009, as reflected by the 16.94% gain posted by the Eurekahedge Asian Hedge Fund Index, which is more than double the 8.25% gain generated by their global peers represented by the Eurekahedge Hedge Fund Index over 2017. Incredible stock market rallies across the continent, especially in Greater China and India, combined with strong economic growth have greatly contributed to the performance of the hedge fund managers with exposure toward the region.


Asian Hedge Funds Infographic April 2018

Eurekahedge

Eurekahedge’s Asian hedge funds infographic sums up the industry as at April 2018. Find out more about Asian hedge funds assets under management (AUM), asset flows into strategic and regional mandates, strategy returns, fund size and geographic AUM, head office locations and the best and worst performances of the year.


Flip-Flopping on Policy – The Australian Government’s Approach to MITs and Stapled Structures

Muhunthan Kanagaratnam, Chris Merjane, Tina Chen and Matthew Charman, Gilbert + Tobin

The Australian Government has targeted the use of Managed Investment Trusts (MITs) by foreign investors in a reversal of original policy objectives to the introduction of MITs, while couching the proposed package in terms of levelling the playing field.


Important Changes to Regulations and Compliance for Investment Funds

Jonathan Culshaw, Ian Gobin, Matt Taber and Thomas Dugdale, Harneys

This alert highlights important changes to the regulatory and compliance regime for the Cayman Islands investment funds industry in 2018


New Regulations Increase Uncertainties Regarding Chinese Investments in Offshore Funds

Serena Tan, Ken W. Muller, Stephanie C. Thomas, Jason R. Nelms and Chuan Liu, Morrison & Foerster LLP

On March 1, 2018, the Administrative Measures for Outbound Investments by Enterprises (??????????) (“Circular 11”) issued by the National Development and Reform Commission (the “NDRC”) went into effect. In addition to regulating direct outbound investments by Chinese companies in general, Circular 11 introduces a new regulatory framework administered by the NDRC governing Chinese companies’ sponsorship of, and investment in, offshore private equity investment funds.


Regulators "Coin" Opinions on ICOs

Brett Hillis, Kari S. Larsen, Alexander Murawa and Rebecca Kellner, Reed Smith LLP

In the latest of a series of articles commenting on global regulatory developments in cryptocurrency, this client alert explores recent regulatory engagement with the token market (with a particular focus on Europe) and looks ahead to proposals for 2018. Gibraltar’s ICO regulations, as well as the Swiss regulator’s publication of ICO guidelines have arguably set the tone for an interesting year in the developing regulatory landscape.


Structural Changes in Hedge Fund Financing Transactions

Bryan L. Barreras, Mayer Brown LLP

A fund of hedge funds (“FoHF”) is an investment vehicle that offers its investors exposure to a portfolio of hedge funds selected by the investment manager of the fund. The investment manager uses his/her knowledge, diligence and expertise to select and manage the hedge fund portfolio, saving his/her investors from the need and the operational and resource commitments to do so. In implementing their investment strategy, FoHFs often utilize financing transactions for various purposes, among them to provide leverage and liquidity. Regardless of purpose, because these funds have no natural life span, the financing transactions typically remain in place for lengthy periods of time. And because of their relatively long durations, these transactions often require amendments to accommodate changes to the fund, transaction or structure of the pledged collateral. While many such amendments are routine in nature and may require limited legal analysis, amendments related to, or arising out of, ce


March 2018

The Eurekahedge Report - March 2018

Eurekahedge

The benchmark Eurekahedge Hedge Fund Index was down 1.62% in February, while the MSCI World Index was down 3.68% over the month. Total assets under management decreased by US$39.2 billion during the month as the sector witnessed a performance-based decrease of US$34.2 billion while registering net asset outflows of US$5.0 billion. The total size of the industry now stands at US$2.49 trillion.


Asset Flows Update

Eurekahedge

The Eurekahedge Hedge Fund Index declined 1.62% in February outperforming underlying markets as represented by the MSCI World Index which fell 3.68% over the same period. Among regional mandates, Latin American managers led the table, up 0.66% during the month while other regional mandated funds languished into negative territory. Across strategies, distressed debt hedge funds led the table with gains of 1.32% followed by arbitrage hedge funds which were up 0.53%.


Hedge Fund Performance Commentary

Eurekahedge

Global markets underwent a sharp and speedy correction in February which saw equity markets post steep losses as investors prepared for a faster than expected interest rate hike in the US. The average return of the global hedge fund industry was pulled into negative territory as markets experienced sharp reversals, with trend following CTA/managed futures and long/short equities strategies lagging behind the pack. Hedge funds registered their first monthly loss of the year with the Eurekahedge Hedge Fund Index down 1.62% in February as volatility levels spiked across the board and unravelled the volatility risk premium trade. Despite steep losses during the month, hedge funds have protected on the downside and managed to outperform underlying markets as the MSCI AC World Index (Local) declined 3.68% in February.


Billion Dollar Systematic Macro Hedge Funds Lose Close to 5% in February

Eurekahedge

This piece looks at the performance of CTA/managed futures hedge funds and its various sub-groups which have come under pressure during the difficult market environment of February. We conclude by looking at the returns for the industry heavy weight systematic macro hedge funds overseeing assets in excess of US$1 billion which recorded steep monthly losses in February declining 4.77%. In contrast to popular news insinuating that the recent market melt-down was the doing of a handful of AI hedge fund managers which recorded their worst monthly loss on record, it seems that the major casualties lie somewhere elsewhere.


2017 Overview: Key Trend in North American Hedge Funds

Eurekahedge

The North American hedge fund industry grew by US$136.4 billion over 2017, owing to the strong performance of hedge fund managers, as indicated by the 8.60% gain posted by the Eurekahedge North American Hedge Fund Index over the year, which is its strongest performance since 2013. Thanks to the strong equity market performance around the globe, hedge funds with high long exposure to equities enjoyed the benefits of the record breaking equity market rallies. Despite falling behind their peers from Latin America and Asia, North American hedge funds kicked off 2018 with a decent performance, gaining 1.54% in January. Long/short equities funds topped the chart among strategic mandates with their 2.04% gain over the first month of 2018.


North American Hedge Funds Infographic March 2018

Eurekahedge

Eurekahedge’s North American hedge funds infographic sums up the industry as at March 2018. Find out more about North American hedge funds assets under management (AUM), asset flows into strategic and regional mandates, strategy returns, fund size and geographic AUM, head office locations and the best and worst performances of the year.


Independent Directors on Hedge Fund and Private Equity Boards - The Cayman Trend

Joanne Huckle, Ogier

It has become an established industry norm to see independent directors appointed to the boards of offshore hedge funds. It is no longer a 'check box exercise' to confirm independent directors have been appointed. Institutional investors are increasingly concerned about the composition of the board, the experience and skill set of its members and the day to day relationship between both the board members themselves and the board and the investment manager.


New Guidelines on Investment by Private Equity Funds in Insurers

Shubhangi Pathak and Priya Misra, Tuli & Co

By way of a June 10 2016 order, the Insurance Regulatory and Development Authority of India (IRDAI) set up a committee to evaluate the risk-based capital approach and market-consistent valuation of liabilities of Indian insurance business. The committee's report, released on July 17 2017, noted that after almost 15 years of promoter-run business (almost all existing entities are joint ventures with foreign companies), the Indian insurance industry is still dominated by government-owned public sector companies, and private insurance players in India are largely owned by well-established businesses.


Private Equity and Venture Capital in the UK

James Taylor and Mark Saunders, Osborne Clarke

By a number of measures, private equity transactions hit a post-financial crisis high in the UK in 2017. An abundance of dry powder and more relaxed debt terms from lenders, combined with the rates at which private equity sponsors are able to raise bonds and loans reaching all-time lows, has contributed to a busy 12 months for the market. This growth may also be in part attributable to private equity funds having become more comfortable with the new political landscape in the UK, as the dust begins to settle 18 months on from the Brexit referendum.


Protecting Minority Investments in UAE Companies

Gary Watts, Al Tamimi & Company

Over the past two decades, the United Arab Emirates (“UAE”) has acquired a richly deserved reputation as a dynamic business environment for investment, and a great place to buy, or to establish, a business.


US Tax Reform and Its Implications for Australia

Professor Richard Vann, Toby Eggleston and Nick Heggart, Greenwoods & Herbert Smith Freehills

This tax brief discusses those aspects of the US tax reform which have most relevance to Australian corporate and international taxation, both from a tax policy perspective and for inbound and outbound investment to and from the US.


February 2018

The Eurekahedge Report - February 2018

Eurekahedge

The benchmark Eurekahedge Hedge Fund Index was up 2.20% in January, while the MSCI World Index was up 3.78% over the month. Total assets under management (AUM) increased by US$42.0 billion during the month as the sector witnessed performance-based increase of US$20.3 billion while registering net asset inflows of US$21.7 billion. The total size of the industry now stands at US$2.49 trillion.


Asset Flows Update

Eurekahedge

The Eurekahedge Hedge Fund Index was up 2.20% in January while underlying markets as represented by the MSCI World Index gained 3.78% over the same period. Among regional mandates, Latin American managers led the table, up 4.47% during the month followed by Asia ex-Japan managers who were up 3.72%. Across strategies, CTA/managed futures hedge funds led the table with gains of 3.54% followed by long/short equities hedge funds which were up 2.37%.


Hedge Fund Performance Commentary

Eurekahedge

January was a happy start to the year for hedge funds, with the Eurekahedge Hedge Fund Index up 2.20% in January. Meanwhile, underlying markets as represented by the MSCI AC World Index (Local) gained 3.78% over the same period. As the global risk on mode continues into January, trend following managers were positioned in good stead with holdings into equities and oil among performance contributors.


Artificial Intelligence: The New Frontier for Hedge Funds (2/2)

Eurekahedge

This piece revisits the performance of hedge funds that utilise artificial intelligence and machine learning theory in their trading process, focusing on the overall risk-return profile of artificial intelligence (AI) hedge funds as captured by the Eurekahedge AI Hedge Fund Index in comparison to traditional quants, equity-hedge strategies and the average global hedge fund.


2017 Overview: Key Trends in Islamic Funds

Eurekahedge

The Islamic finance industry is a niche market predominantly serving the needs of the world’s Muslim population. Products marketed under the umbrella of Islamic finance comply with a different investment philosophy as opposed to traditional investment philosophy which the rest of the world are familiar with.


2018 Key Trends in UCITS Hedge Funds

Eurekahedge

Since the onset of the global financial crisis, investors worldwide have grown more cautious in undertaking investments and have increased their demands for underlying investment products and instruments to be monitored by international compliance standards. The Undertakings for Collective Investment in Transferable Securities or ‘UCITS’ was developed to meet this post-crisis demand, as UCITS embodied by strong regulation resulting to a high level of investors protection with certain restrictions such as liquidity of the underlying assets and leverage caps to provide added transparency to investors.


UCITS Hedge Funds Infographic February 2018

Eurekahedge

Eurekahedge’s UCITS hedge funds infographic sums up the industry as at February 2018. Find out more about UCITS hedge funds assets under management (AUM), asset flows into strategic and regional mandates, strategy returns, fund size and geographic AUM, head office locations and the best and worst performances of the year.


Australian Islamic Finance Opportunities for 2018

Christopher Aylward, Islamic Finance News

As with a number of other developed economies which are ‘developing nations’ in the world of Islamic finance, Australia is all about opportunities and what could be. The difficulty is determining whether these opportunities will be seized and what will be.


Canadian Taxation of Cryptocurrency … So Far

Mariam Al-Shikarchy, Steven Baum and Laura Gheorghiu, Gowling WLG

Cryptocurrency is digital "money" that utilises encryption techniques to regulate the issuance of units and verify their transfer. Cryptocurrency operates without the participation of a central bank or other government agency.


US Tax Reform - Provisions Impacting Private Equity

Patricia W. McDonald, Baker McKenzie

On December 15, 2017, a Conference Committee established by the House of Representatives and the Senate released a unified agreement on the “Tax Cuts and Jobs Act” (the “Conference Agreement”) in the wake of the passages of the House version of the Tax Cuts and Jobs Act on November 16, 2017, and the Senate version on December 2, 2017.


January 2018

Eurekahedge Asian Hedge Fund Awards 2018

Eurekahedge

The 15th annual Eurekahedge Asian Hedge Fund Awards ceremony took place on 25 May 2018 with a crowd of 230 attendees coming together to celebrate the 85 best performing Asian hedge funds of 2017. The Best Asian Hedge Fund award went to Red Cliff Asia Fund – an Asia focused relative value player.


The Eurekahedge Report - January 2018

Eurekahedge

The benchmark Eurekahedge Hedge Fund Index was up 0.86% in December, while the MSCI World Index up 1.19% over the month. Total assets under management increased by US$21.9 billion during the month as the sector witnessed a performance-based increase of US$9.4 billion while registering net asset inflows of US$12.5 billion. The total size of the industry now stands at US$2.44 trillion.


Asset Flows Update

Eurekahedge

Hedge funds edged higher in the final month of the year, with the Eurekahedge Hedge Fund Index gaining 0.86% in December while underlying markets as represented by the MSCI World Index was up 1.19% over the same period. Among regional mandates, Latin American managers led the table, up 2.50% during the month followed by Asia ex-Japan managers who were up 1.41%. Across strategies, event driven hedge funds led the table in December with gains of 1.57% followed by multi-strategy hedge funds which were up 1.31%.


Hedge Fund Performance Commentary

Eurekahedge

2017 ended positively with much pomp and was a strong year for global markets. Hedge funds closed the final month of the year in positive territory with the Eurekahedge Hedge Fund Index up 0.86% in December while the MSCI World Index finished the month up 1.19%. For 2017 as a whole, hedge funds were up 8.25%, while underlying markets as represented by the MSCI World Index returned 17.55% over the same period.


Eurekahedge European Investor Perspectives – Series 1 of 2

Eurekahedge

Altinvestor Europe 2017 took off with a powerful opening presentation from a highly experienced pension executive presenting on how pension funds could secure long term success through collaboration with peers and asset managers and taking a more active and innovative approach to pension fund investment management.


2017 Overview: Key Trends in Global Hedge Funds

Eurekahedge

The Eurekahedge Hedge Fund Index gained 7.32% as of November 2017 year-to-date, and is on track to post 12 consecutive months of positive gains in an annual year for the first time since 1999. Total assets managed by the global hedge fund industry currently stands at US$2413.0 billion, up US$188.2 billion over the year, which is the highest annual growth recorded since the end of 2013.


Global Hedge Funds Infographic January 2018

Eurekahedge

Eurekahedge’s global hedge funds infographic sums up the industry as at January 2018. Find out more about global hedge funds assets under management (AUM), asset flows into strategic and regional mandates, strategy returns, fund size and geographic AUM, head office locations and the best and worst performances of the year.


Is a Digital AUD the Way of the Future?

Hillary Ray, Cowell Clarke

As the payments system continues to evolve, the RBA’s Governor considers the pros and cons of a digital dollar.


Tax Cuts and Jobs Act Could Have Significant Impact on Structuring of US and Foreign Investments

Gerald Rokoff, Stacy M. Paz, Bruce J. Wein, Frank Ikonero Mugabi, Drew M. Young, DLA Piper LLP

The Tax Cuts and Jobs Act (the New Tax Law), signed into law in late December by President Donald Trump, makes major permanent and temporary changes to the US federal tax system. The changes will have a significant impact on the structuring of US and foreign investments.


Turkey Would Be the Global Hub for Islamic Banking and Finance

Zubair Mughal, Center of Islamic Banking and Economics

Touching the borders of Asia and Europe, Turkey is a splendid country full of God’s blessings that include its amazing geographical location. Its shoreline is a bridge between Europe, Asia & Africa, considering multiple factors including its important role within the region and its geographical conditions, it’s not wrong to say that the prospects of Turkey to become Islamic banking and finance hub is very high, due to different financial, economic and other regional issues in emerging Islamic finance centers.


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