47 Degrees North Capital Management is a specialist alternative investment firm, and a pioneer in early-stage hedge fund investing. It was selected as one of three successful candidates out of 97 applicants to manage the emerging hedge fund managers program at CalPERS.
47N is a leading proponent of corporate governance in the hedge fund industry; so the objective of this series of articles is to discuss and inform on current corporate governance issues.
The old joke about the consultant who goes
to Heaven complaining there must be some
mistake - he is far too young to be there - only
to be met by the response that, according to
the hours he's billed his clients, he is 104 years
old. Change "consultant" to "professional fund
director" and "hours billed" to "number of boards
sat on" and you capture the current controversy
surrounding firms in the business of supplying
directors to hedge funds. The difficulty of
diligently carrying out corporate governance
duties while sitting on so many boards (some individuals sit on hundreds
of boards) is not hard to imagine - especially when complicated strategies
are involved or when difficult issues arise.
47N considers three "pillars" of corporate governance before investing;
alignment of interest, control of assets and transparency. Few important
corporate governance principles get such little attention as the second
of these - control of assets - or at least not until it's too late. In the midst
of the credit crunch in 2008 a lot of lessons were learned (again) - one of
these is the importance for investors to have control over their investments
when push comes......................
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This article was published in Opalesque's New Managers
a top-down monthly analysis, news and research publication on the global emerging manager space.