Archive for March, 2010

Guillaume Rambourg Suspension

Gartmore Suspends Hedge Fund Manager Amid Investigation

Gartmore, an investment fund firm in the UK, has suspended a top hedge fund manager a violation of “internal procedures.”  The firm had a talk with the Financial Services Authority, the regulator which is conducting an investigation into possible insider trading, and decided to suspend Guillaume Rambourg.  The news sent Gartmore shares down by as much as 30%.

UK fund firm Gartmore (GRTR.L) suspended a top fund manager on Tuesday as it probed a breach of internal procedures, sending shares plunging to almost half the level at its initial public offering three months ago.

In a statement, Gartmore said Guillaume Rambourg, a close colleague of Gartmore’s most high-profile fund manager Roger Guy, was suspended pending the outcome of an internal investigation into whether he had been “directing trades”.

Gartmore declined to say officially what “directing trades” referred to, but a company source said the probe had related to favouring certain brokers when carrying out dealings.
The source also said there was no timeframe for an end to the investigation, and that no other Gartmore fund managers were under scrutiny.  Source

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Tags: Guillaume Rambourg, Guillaume Rambourg Suspension, Gartmore Suspends Guillaume Rambourg, Hedge Fund Manager Guillaume Rambourg

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Dubai Shariah Hedge Fund

Dubai Shariah Asset Management Hedge Fund Launches

An interesting new fund has opened its doors to investors.  Dubai has announced the opening of its Shariah hedge fund, Dubai Shariah Asset Management, after a stellar performance by last year’s first fund of funds.  The fund of funds outperformed indexes, returning 41% in 2009, solidifying hopes that the hedge fund will perform similarly.  Launching hedge fund is a notable change in the region’s investment preferences–money tends to go toward more long term investments like real estate and buyout funds.

Fund operator Dubai Shariah Asset Management, or DSAM, sees this as proof that a hedge fund based on Islamic law, or shariah, can provide similar or better returns than conventional hedge funds.

Portfolio managers at BlackRock Inc., Tocqueville Asset Management, Lucas Capital Management LLC and Zweig-DiMenna International Managers Inc. were given an initial mandate to invest in commodity-company stocks that were screened to meet certain requirements. The $260 million currently managed by the four is dubbed the DSAM Kauthar Commodity Fund, named after a river in heaven described by the Quran.

The hedge-fund experiment was a departure for the region’s investors, who traditionally put money into real estate, private equity or long-only mutual funds. Hedge funds were shunned due to their secretive trading strategies, which often couldn’t be checked for shariah compliance. But Islamic banks around the Arabian Peninsula, which have recently started or bolstered their asset management divisions after real estate prices collapsed, are starting to show interest.
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Related to: Dubai Shariah Hedge Fund

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Tags: Dubai Shariah Hedge Fund, Hedge Funds, Shariah, Hedge Funds in Dubai, Middle East Hedge Funds, Dubai Hedge Funds, Shariah Law Hedge Funds, Shariah Investments

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HedgeCo News – BNY Mellon was named Best Fund Administrator – Hedge Funds and Best in Corporate Trust for the at The Asset magazine’s Triple A Transaction Banking Awards 2010.

Scooping six accolades including the title of Best Global Custodian in Asia for the third consecutive year, BNY Mellon’s Corporate Trust division also walked away with the trophies for Australia, Korea and India.

“Hedge funds are increasingly turning to BNY Mellon not only because of our global strengths, but also because of our sophisticated local capabilities in the region.” Andrew Gordon, Head of Alternative Investment Services for Asia at BNY Mellon, said, “They believe it is vital to choose a partner which has a long term commitment to Asia. This award underlines the strengths of our offering and shows that our focus on quality and service excellence over the last three years has paid off handsomely.”

BNY Mellon has $22.3 trillion in assets under custody and administration, $1.1 trillion in assets under management, services $12 trillion in outstanding debt and processes global payments averaging $1.6 trillion per day.

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HedgeCo News – New York hedge fund manager, Fund.com, Inc., has acquired a $1 billion hedge fund distributor based in West Palm Beach Fl., Weston Capital Management, LLC.

“With Weston Capital’s proven capability to seed new fund products, combined with its seasoned global institutional sales force, Fund.com is now positioned to capture revenue streams from an array of hedge fund and actively managed ETFs.” Gregory Webster, CEO at Fund.com, said.

Founded in 1993, Weston originates and markets fund of funds, single-manager hedge funds and raises capital to seed new hedge funds. In 2010, Weston Capital formed a strategic alliance for investment manager identification and fund seeding with Harcourt AG, a $4.5 billion alternative investments manager that is majority owned by Vontobel Group, the $70 billion Swiss banking group, is a leading global advisor of alternative investments for institutional investors.

Under the Harcourt strategic alliance, Weston Capital and Harcourt will seed and develop new hedge fund businesses via Weston Capital’s incubation platform. The alliance combines Weston’s extensive experience in early stage hedge fund investing and marketing with Harcourt’s proven investment expertise in global manager selection, due diligence and risk management.

Weston Capital founder Albert Hallac continues as CEO of Weston Capital, directing its day-to-day operations and business strategy. In addition, Fund.com Chairman Joseph J. Bianco will become Chairman of Weston Capital. Weston Capital also has offices in London and New York City.

Since January 2004, Weston Capital’s hedge fund seeding platform (via the Weston-Atlas Partners Fund and the Weston Capital Partners Fund II) has provided sponsor capital for 13 emerging hedge fund managers. Weston intends to raise $250 million for its third incubation fund, Partners III, which will seed both hedge funds and actively managed ETFs, with Harcourt providing investment infrastructure and risk management.

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CFA Exam Overview

The Chartered Financial Analyst (CFA) designation is a widely recognizable professional title for financial analysts in the investment management industry.  In order to earn the CFA Designation and become a CFA Charterholder, you must first enroll in the CFA Program at the CFA Institute and then pass the CFA exam.  The CFA exam is an important and difficult test that measures a candidate’s comprehension of the CBOK – the Candidate Body of Knowledge curriculum that is created by the CFA Institute.  A candidate will receive the CBOK curriculum upon registration so that studying can begin immediately.

Candidates will need to pass three distinct “levels” and will also need to have certain industry experience in order to receive the designation.  In order to take any level of the exam, a candidate must have a bachelor’s degree (or be enrolled in the final year of your bachelor’s program) or four years of related work and/or college experience.  This article will detail the requirements for each level and discuss other aspects of the designation.

Level I

The Level I is the first exam in the series and is the only exam that is offered twice a year (June and December).  The exam is multiple choice and has 10 main topics, with a slightly more concentrated focus on Ethical and Professional Standards, Investment Tools, and Asset Classes.

Major Items:

• Test time: about 6 hours
• December 2009 passing rate: 34%
• June 2009 passing rate: 46%
• Cost: Price varies depending on when you register -

9 months prior: $1020

4 months prior: $1110

3 months prior: $1435

• When to take: June and December
• Where to take: There is a list of CFA Exam locations on the CFA Institute website

Major Topics:

• Ethical and Professional Standards
• Quantitative Methods
• Economics
• Financial Reporting and Analysis
• Corporate Finance
• Investment Tools
• Equity Investments
• Fixed Income
• Derivatives
• Alternative Investments
• Asset Classes
• Portfolio Management and Wealth Planning

Level II

The Level II is the second exam in the series.  It consists of item-set questions and emphasizes the application of concepts that are introduced in Level I.  It tends to focus more on Investment Tools, Equity Investments, and Asset Classes.  Additionally, the exam presents ten hypothetical cases that include a series of multiple-choice questions to answer afterward.  In order to take this exam, you must have earned a passing grade on the Level I.

Major Items:

• Test time: about 6 hours
• June 2009 passing rate: 41%
• Cost: Price varies depending on when you register:

9 months prior: $1020

4 months prior: $1110

3 months prior: $1435

• When to take: June
• Where to take: There is a list of CFA Exam locations on the CFA Institute website

Major Topics:

• Ethical and Professional Standards
• Quantitative Methods
• Economics
• Financial Reporting and Analysis
• Corporate Finance
• Investment Tools
• Equity Investments
• Fixed Income
• Derivatives
• Alternative Investments
• Asset Classes
• Portfolio Management and Wealth Planning

Level III

The Level III is the final exam in the series.  It consists of item-set questions and an essay, and tests a candidate on all concepts and applications introduced in each previous exam.  The exam’s predominant focus is on Portfolio Management and Asset Classes.   In order to take this exam, you must have earned a passing grade on the Level II.

Major Items:

• Test time: about 6 hours
• June 2009 passing rate: 49%
• Cost: Price varies depending on when you register:

9 months prior: $1020

4 months prior: $1110

3 months prior: $1435

• When to take: June
• Where to take: There is a list of CFA Exam locations on the CFA Institute website

Major Topics:

• Ethical and Professional Standards
• Equity Investments
• Fixed Income
• Derivatives
• Alternative Investments
• Asset Classes
• Portfolio Management and Wealth Planning

Grading and Exam Day

The exams are reported as “pass” or “fail” within 90 days after the exam is taken and the scores are only available online.  There is no minimum passing score for any of the exams.  Instead, the CFA determines the passing level each year after all exam scores are processed.  The CFA Institute suggests that successful candidates spend at least six months and 300 hours preparing for the exam, which had a combined average passing rate of 42.5% for 2009. However, the Institute also acknowledges that a significantly greater amount of preparation time may be required depending on each individual candidate.  The duration of the exam lasts around six hours, with a typical exam day beginning around 8 a.m. and ending around 5 p.m.  The day is broken up by morning and afternoon sessions and includes a lunch break in the afternoon.

Membership – Experience & Dues

In order to maintain your CFA charterholder membership after passing all three exams, you must have accrued at least 48 months of acceptable professional work experience either before or during the program, or after you have passed the exam.  This experience must be in a full-time position and 50 percent of the work must include direct involvement in the investment-decision making process and engagement in responsibilities and/or producing a work product that informs or adds value to that process.  Unacceptable work experience includes summer, part-time, and internship positions, and work that involves managing your own investments.  You can view sample work experience descriptions and titles on the CFA Institute website: http://cfainstitute.org/cfaprog/charterholder/membership/work_descriptions.html

In addition, you must also submit an annual Professional Conduct Statement and pay annual membership dues of $225.  The Professional Conduct Statement must be signed by all members and must disclose any professional-related litigation or arbitration, customer complaints, and/or disciplinary proceedings.  It can be signed online when you pay your membership dues.  As a member, you are also required to comply with the policies and procedures outlined in the Articles of Incorporation and Bylaws, Code of Ethics and Standards of Professional Conduct, Rules of Procedure for Proceedings Related to Professional Conduct, and any other conditions or requirements established by the Institute.  These policies can also be found on the CFA Institute’s website: http://cfainstitute.org/cfaprog/charterholder/maintain_status.html

Conclusion

While the preparation for the exam may be rigorous and the exam itself may be challenging, there are a number of benefits for earning the title of CFA Charterholder.  The CFA Institute cites the global networking opportunities that come with earning the CFA designation, as well as the mark of expertise and professionalism that will allow clients and colleagues to hold you in a higher regard.  Although the exams are suggested to be completed over a course of three years, there is no maximum length of time to complete all three levels.  Each exam can also be taken an unlimited number of times in the event that you do not pass.  There is also an extensive amount of study guide and review opportunities offered in print or online to ensure that you are well-prepared for the exam.

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Please contact us if you have a question on this article or if you interested in starting a hedge fund.  Other related hedge fund law articles include:

• Hedge Fund Managers
• Series 7 Exam
• Overview of the Series 65 exam
• Start Up Hedge Fund Timeline

Bart Mallon, Esq. of Mallon P.C. runs the Hedge Fund Law Blog.  He can be reached directly at 415-868-5345.

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“Well the GSEs made out like blue bloody bandits against the homeowners, set up to collect inflated mortgage payments on homes whose value has collapsed for years and years into the future except … their counterparties on that trade are defaulting left and right. Oops!”
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Make no mistake, the much claimed Australian housing shortage will also be seen as a myth after our housing market crashes. The Australian market is making the same mistakes as the US.

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“Last Friday, the Obama administration announced changes to its Home Affordable Modification Program (HAMP) The most significant change is “principal reduction”. By reducing the balance on underwater loans, the administration hopes to lower the number of foreclosures which have soared to more than 300,000 per month. This looks like a plan that could work, since most foreclosures are the result of negative equity or unemployment. If the banks and other investors agree to the terms of the program (and it looks like they will) then more homeowners will be able to avoid foreclosure, prices will stabilize, and the recovery will gain momentum. There is one drawback, however, which is moral hazard writ large. ”
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““The incentive was perverse,” said Michael Lea, a finance professor at San Diego State University and former chief economist at mortgage giant Freddie Mac. “The fee structure encouraged TCW to put lower-rated bonds into CDOs over time.””
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“How nice it is to see some mortgage fraudsters get what they deserve- for a change”
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