Welcome to our inaugural Opalesque Florida Roundtable, which could also be called the Due Diligence issue!
Florida's geographical proximity to South America and the Caribbean has made the state one of the most important gateways into these regions. Other differentiators include obviously the quality of life, warm weather and the absence of a state income tax. While the advantages of South Florida will continue to drive the growth of hedge funds based there, Florida-based or managed funds may have a reputation of not matching the quality of say, Greenwich funds. However, the participants of this Roundtable believe this is a mistaken perception.
True - over the years, Florida may have had more than its fair share of fraud and hedge fund failures; but at the same time, there have been many failures around the world as well. Florida has a high concentration of high networth individuals - not only U.S. or Latin American, but also from many other parts of the world - who maintain a second home there. While traditionally those private clients have been less rigorous than most institutions in due diligence, Madoff will have changed a lot in that respect.
This Opalesque Roundtable circles around Due Diligence and provides unparalleled insights and updates from practitioners and academics. Hear from Rainford Knight, Ph.D, Co-founder of the Florida Institute of Finance, how his “Due-Diligence DNA” attempts to quantify what is “known and unknown”. This approach goes way beyond the “check-the-box” approach and even further than a forensic process by “decomposing the double helix of investment and operational due diligence to an incredibly detailed level so that basic building blocks of a hedge fund’s strategy and its operational processes can be analyzed, mapped, cross-checked and cross-verified”, allowing a much greater level of transparency.
Hedge fund manager Jonathan Binder says although he is registered with the SEC as a registered investment advisor, “clearly that represents no assurance of any sort to investors that you are doing what you say you are doing or will not find some way to defraud people. We have had due diligence from funds of funds, insurance companies, consultants, you name it, and we have passed every single one, but I would suggest that very few of them really touched on what I would see from my point of view as being important.”
The Opalesque Florida Roundtable was sponsored by Kaufman Rossin Fund Services and Wells Fargo Insurance Services. We also thank the Opalesque 2010 Roundtable Series Sponsors Custom House Group and Taussig Capital for their support. Hear from:
Benjamin Hein, Senior Portfolio Manager, Head of Investment Management, PRS Investment Advisory
Rainford Knight, Ph.D., Managing Partner, Florida Institute of Finance
Jonathan Binder, Managing Director, Consilium Investment Management
Paul Grassi, Hedge Fund Practice Leader, Wells Fargo Insurance Services USA
Jorge de Cardenas, Co-Founder, Kaufman Rossin Fund Services
Kenneth (Ken) Webster, President & Chief Operating Officer, John W. Henry & Company
Stephen Malloy, CEO, Tunnelbrook Capital, LLC
Pete Windhorst, CFO, Collins Capital
additional details about:
how hedge fund administrators themselves are conducting due diligence on managers; and investors on administrators
what types of hedge funds are being launched from Florida in 2010
how Florida based alternative investment firms successfully bring their products to a wider audience
the latest research about manager life-cycles, how to filter the emerging manager universe and capture the best return stream at the optimal time
how the crisis has changed the world: Why the traditional characterization of “developed markets” and “emerging markets” has become a trap for investors – and what you should really look out for instead
... an update on hedge fund's D&O (Directors and Officers) insurance: Hedge fund products are complicated and probably twice as expensive as those for straight public-companies. Still, many funds over $500 million in AUM have been raising their coverage limits, year over year, for at least the last three years. But, which funds get the “good pricing, good rates and attractive terms and conditions”?
Enjoy the read!
Director Opalesque Ltd.
The Opalesque Roundtable Series offers unparalleled intelligence on the most important global hedge fund jurisdictions and their players. The Roundtable Series is a free publication from Opalesque and is continually updated. Please scroll down to view the full selection of our Roundtables - covering the globe!