Kicking Off the Hedge Fund Insiders Article Series
Hedge funds operate in a dynamic, ever-changing environment, so to assist managers in staying abreast of hot topics, we are launching a new article series aptly titled, The Hedge Fund Insiders Series. Running right here on HedgeIT during the month of August, we’ll cover a range of topics aligned to investor and regulator expectations, due diligence trends and operational best practices.
Contributors to the Series include senior leaders at Eze Castle Integration, CBRE Group, Inc., Haynes and Boone LLP, TriNet, Wells Fargo Prime Services and Willis Group Holdings Ltd.
Here is a sneak peak of some of the articles we will publish each Tuesday and Thursday starting this week:
Keys to Building an Effective Alternative Asset Manager and Prime Broker Relationship
Wells Fargo Prime Services
Excerpt: All business relationships are driven by the belief that both sides will receive a mutual benefit that will allow for a long term sustainable partnership between the firms. For a prime brokerage /alternative asset manager relationship this principle is no different. An alternative asset manager (“AAM”) looks for certain services from its prime broker (“PB”): financing, access to balance sheet, securities lending, Capital Introduction, research, Corporate Access, technology and other services that are essential to the AAM as it deploys its strategy. PBs are looking to generate an attractive after cost return based on the revenue generated from the client vs. usage of financial resources such as balance sheet and capital. Read the full article.
Cybersecurity Risks and Implications for Investment Advisers
Haynes and Boone LLP
Excerpt: Cybersecurity risks pose an increasingly significant threat to investment advisers. In April 2015, the SEC’s division of investment management (the “Division”) issued guidance (the “Guidance”) reinforcing cybersecurity as a priority for advisers and suggesting that advisers implement cybersecurity risk assessment plans, response strategies, and written policies and procedures. This article provides measures advisers should consider (some of which are directly from the Guidance) when addressing cybersecurity risks relating to their operations. Read the full article.
Three Real Estate Trends Facing Today’s Hedge Funds
CBRE Group, Inc.
Excerpt: While there are several trends continuing to proliferate in the market, this article explores three real estate-related issues relevant to all hedge funds. First up is increasing construction costs. Construction costs for office interiors throughout New York City are rapidly increasing and firms that built space 5–10 years ago will find that overall expenditures for the same quality installation have increased 30–40% based on benchmark construction cost data across NYC.
Next is the strong preference for new construction. The average age of a Midtown building is 62 years old. Older buildings suffer from inefficiencies and challenges which have created a demand for newer product. A third trend explored in the article is the expanding of geographic parameters. With a significant number of hedge fund principals now choosing to live in Tribeca, SoHo and other Downtown neighborhoods over more traditional locations on the Upper East or Upper West Side, geographic parameters for hedge fund offices have broadened. Read the full article.
Other topics we’ll cover include:
Exploring the Cyber Claims Landscape and Remedies Sought (By: Willis Group Holdings Ltd.)
Diving Deep in IT Due Diligence Questionnaires, Annual Assessments