Ron Geffner Bailey McCann, Opalesque New York:
Hedge fund managers, attorneys, and auditors are convening at the Alternative Assets Summit in Las Vegas, Nevada to discuss the latest trends and changes to the industry. Speakers have offered up a variety of viewpoints on investments and the economy, but most notably many are also talking about more traditional issues like mutual fund structures, and employment agreements.
"I'm not saying a handshake is a bad way to work, but when someone asks for an employment agreement in the diligence process and you don't have one, that's going to be a flag," said Ron Geffner an attorney with Sadis Goldberg, in a morning panel about institutionalization. He notes that the era of building a hedge fund staff from friends brought in on a handshake is coming to an end as investors expect to see a more corporate approach to running the business. "At the end of the day, a hedge fund is still a business," he said.
Other sweetheart deals common to marketing and capital raising may also raise red flags with investors and regulators. Fund managers that set up a capital raising arrangement with someone who doesn't have a Series 7 may find themselves running counter to the law. "I've never actually met a finder," Geffner said referring to the terminology in the regulation. "There may be that one off phone call from someone's aunt, but the person you're paying a bonus to is not a finder."
'40 Act funds get ch......................
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