Tue, Jun 18, 2019
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: Risks to hedge funds from Panama Papers

Thursday, April 14, 2016

From Finomial Corporation: While the media focus to date has been on the law firm’s role (Mossack Fonseca) in creating shell entities (which in many cases are legal), Finomial protects hedge funds from the risk of unwitting acceptance by the investment management community of money from entities with unknown beneficial owners.

Hedge funds are vulnerable to unintentionally accepting investments from entities with anodyne names and obscured beneficial owners. A shell entity’s capital can be accepted by a hedge fund, theoretically, only once it has undergone a rigorous - yet entirely manual - process. Unfortunately, the value of a rigorous review of investment funds is entirely in conflict with the reality of the ground - manual, opaque investment processing, which is difficult to manage, monitor and audit.

Much of the burden for uncovering potential unlawful investment activity falls on the asset servicers - the fund administrators. They are tasked with an almost impossible responsibility for scrutinizing the documents that are required from hedge fund investors. The fund administrators who are processing money from these entities on behalf of hedge funds have difficulty looking through to these beneficial owners. It is only through rigorous review of paper documentation and a series of offline requests that they might have the opportunity to discover a true beneficial owner, or an inconsistency or a red flag.

The intensely manual nature of investing in hedge funds......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Study shows alignment between seeders and hedge fund managers is improving[more]

    B. G., Opalesque Geneva for New Managers: US law firm Seward & Kissel has just published its Seed Transaction

  2. Trends: Hedge funds increasingly ditching 2 and 20[more]

    Chronic lackluster performance is gradually pushing hedge funds away from the traditional "2 and 20" fee structure to other methods. This trend is emerging as hedge fund fees get squeezed across the board. Average management fees declined to a record low of 1.43% in the first quarter of 2018. N

  3. News Briefs: Selling a stake in a PE management company is fine, say LPs, depending on the GP's motivation, Investment companies need to reimagine for whom and how they create sustainable value, Does your portfolio need a quant fund?, Meet the power players at the SoftBank Vision Fund, 'Talking his own book': Hedge fund manager pans Eisman's short call[more]

    Selling a stake in a PE management company is fine, say LPs, depending on the GP's motivation Opalesque Industry Update - Two thirds of investors will support a GP decision to sell a stake in its management company if it is to facilitate generational change at the business or to strengt

  4. Investing: Hedge funds are very bullish on Lyft, Hedge fund manager Stanley Druckenmiller sells almost all stocks, Short-seller pain that began Monday just switched to a bloodbath, Josh Friedman, the hedge fund titan, is spending $1bn to short the commercial real estate market[more]

    Hedge funds are very bullish on Lyft From Yahoo: Billionaire hedge fund managers such as David Abrams, Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates.

  5. PE/VC: Private equity raking over US-China trade war debris for bargains, Your next check could be cut from one of these atypical VC firms[more]

    Private equity raking over US-China trade war debris for bargains From Finance Asia: Disruption caused by the fractious relationship between the world's two biggest economies spells opportunity for the nimblest investors. Funds are looking to potentially bridge gaps in broken supply chain