Regulatory Compliance Association Reviews

Investor Due Diligence Practices for New Alternative Investment Products and Services™

Practice Edge 02

Investor Due Diligence Practices for New Alternative Investment Products and Services™

Date: February 5, 2015
General Session: 12 Noon to 1:30 PM
Location: Webcast (Free)

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Description: This session will cover a variety of topics relating to legal, regulatory, operational and investment due diligence in order to mitigate the risks associated with investing in privately placed funds. This session will cover a variety of perspectives on issues that should be at the forefront of each of your pre-investment reviews.

 Students will master the following at the conclusion of this session:

•   What are 3 fundamental tenets (“must haves”) of a successful due diligence program?
•   Alignment of interests between investment advisers and clients has been a hot topic for both investors and regulators. What areas of a due diligence program (i.e. employee personal trading, valuation, trade allocation policies, succession planning, etc.) are most important to consider when attempting to better align manager and investor interests?
•   Have diligence processes and negotiations with alternative investment managers changed in the wake of the Kerner piece? What are new areas of focus built into the diligence procedures of large allocators recently?
•   Indemnification and Exculpation: Is the liability of fund managers sufficient under most fund documents? Under what circumstances should managers be indemnified by the funds they manage? What happens if a manager settles a claim without an admission of guilt?
•   Gating and suspensions: Will investors be protected during the next market downturn or illiquidity event? How to structure gating and suspension mechanisms that protect investor interests.
•   Fees and Expenses: Auditing the fees and expenses charged to your fund/account. Common issues that arise with respect to expense allocations
•   Inhibiting liquidity: Are liquidating vehicles merely disguised side pockets? Should managers earn full fees on such vehicles if investor capital is not returned in a timely fashion?

Session Chairman:
Walter Zebrowski, JD, CPA, Principal, Hedgemony Partners
Chairman, Regulatory Compliance Association

Senior Fellow from Practice:
Scott Sherman, JD, Managing Director | Hedge Fund Solutions, Blackstone

Guest Lecturers:

David Warsoff, Executive Director, J.P. Morgan Alternative Asset Management
Maura Harris, Senior Vice President & Director of Operational Due Diligence
Nicole Tortarolo, JD, Executive Director & Head of Investment Structuring A&Q Hedge Fund Solution, USB Alternative & Quantitative Investment