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Hedge Funds and TV Tokyo

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One of the interesting aspects about having a hedge fund blog is that it provides me with the opportunity to connect with many people in the hedge fund industry whom I would normally not have a chance to meet.  I also have the opportunity to talk with various media publications regarding hedge funds.  The two inquiries below come from TV Tokyo who is spotlighting the Lehman crises and doing a report on how hedge funds are currently fairing.  I have received two inquiries now, so if you are interested in talking with them, I am happy to pass along the appropriate contact information.

Any other media organizations who wish to discuss hedge funds or the legal and regulatory aspects of hedge funds are welcome to contact me directly to discuss.

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Hi, I’m from TV Tokyo, Japanese TV production. I’m working on the story about what is going on hedge fund industory after Lehman crises. For our segment,  I’m looking for the indivisual investor who put their money into hedge fund due to due to improved transparency and liquidity terms.and I would like to ask the investor to have our taped interview in next week. If you know someone, please let me know. Thank you so much for taking your time to read this message.

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Dear Bart,

I am a producer at TV Tokyo, a Japanese television network. I am producing a documentary about recovery in financial institutions and markets.  Over the past year or two, markets plunged and many financial institutions, including hedge funds, were bankrupted or merged out of existence.  In a relatively brief time, however, certain markets and financial institutions demonstrated surprising resilience and a return to profitability. This recovery is in marked contrast to the decade long process of recovery in Japan.

In the documentary, I will focus on how financial institutions, markets and exchanges have managed to again make profits in such short period. Among markets, I will focus on the commodity market, which has benefitted from economic expansion in emerging markets and concerns about inflation elsewhere.  As part of that examination, I would also like to feature the IntercontinentalExchange (ICE). Much of the volume in recent commodities trading has occurred on ICE, however, many of our viewers are unfamiliar with it.

I am seeking individuals to interview for the documentary who can speak authoritatively about the above topics.  If you can address these topics on camera, please contact me.

My deadline for filming is the end of August/beginning of September.
I look forward to your reply.

Sincerely,

[Producer]

About TV Tokyo:
TV Tokyo is one of Japan’s six television networks and is a subsidiary of Nihon Keizai Shimbun (Nikkei), Japan’s premier financial journal. We produce Japan’s only daily business and economic news programs, World Business Satellite and News Morning Satellite. Their combined audience averages 5-6 million viewers daily, including Japanese business leaders and influential politicians. A recent study showed our audience to be the most affluent and highly educated in Japan. Past guests include: Prime Minister Yasuo Fukuda; Former Harvard University president Lawrence Summers; professors Joseph Stiglitz (Nobel laureate), Jeffrey Sachs, and Alan Blinder; CEOs Michael Eisner, Steve Forbes, Bill Gates, Steve Ballmer, Jack Welch, Jeffrey Immelt, Larry Ellison, Scott McNealy; investor Jim Rogers, George Soros, Warren Buffett and numerous Japanese business and political leaders.

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Hedge Fund Investors Asking for More Meaningful Communication

Clients are demanding that investment managers communicate more than just data

The following white paper was released by BK Communications Group, a company which provides outsourced marketing and client communications solutions for the asset management industry.  According to a recent survey of institutional hedge fund investors, clients largely prefer that managers take the call for transparency one level further and communicate to them in a meaningful way that explains what they’re doing with the funds.  Popular forms of communication adopted by investment firms include pitch-books, websites, and personal contact.  According to a report by McKinsey & Co., providing full transparency and enhancing communication efforts can be useful in client retention and future asset gathering.

The executive summary and highlights of the paper is re-printed in full below as well as a link to the paper.

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BKCG White Paper
June 2009
The New Transparency: Words

Clients are demanding that investment managers communicate more than just data

Executive Summary

Transparency has typically been equated with access to data (trade, exposure, valuation, etc.), but the financial crisis and fund scandals have led clients, investors, as well as regulators to demand more. Major surveys and anecdotal evidence indicate communication is now in demand. Clients want managers to put the numbers in context, to explain what they’re doing, to communicate on a clear and meaningful basis. This expanded transparency can help retain clients and strategically position a firm for future asset gathering, both by building a brand associated with full transparency and by ensuring that all touchpoints – from pitchbooks to websites to personal contact – are fully in place and high quality. Investment firms must carefully examine how they currently communicate, decide on any adjustments that must be made, and determine whether they have the internal capabilities and resources to execute on those adjustments.

Highlights

  • Communication is the new transparency. Data alone is no longer sufficient. Clients want managers to put the numbers in context, to explain what they’re doing, to communicate on a clear and meaningful basis
  • SEI/Greenwich Associates’ global survey of institutional investors finds investors will “intensify their scrutiny of investment processes” and increasingly emphasize client reporting and communications.
  • Preqin’s survey of 50 institutional hedge fund investors finds that events of the past 12 months have led 43% of respondents to expect “increased transparency and understandable strategy.”
  • Providing full transparency can be a way of helping to retain clients and strategically position a firm for future asset gathering. McKinsey & Co’s major report (“The Asset Management Industry in 2010”) concludes that “winning asset managers will be those who forge a superior reputation and capabilities for service and sophisticated advice.”
  • Communications transparency can be approached strategically, to ensure an investment firm’s brand is associated with openness and clarity, and to establish a reputation for thought leadership, as this is associated with mastery of core competence.
  • Communications transparency can also be approached tactically by making sure that all touchpoints – from pitchbooks to websites to personal contacts – are fully in place and high quality.
  • Many investment firms are shedding internal resources that are not profit centers, including communications personnel, or are hesitant to bring on those resources – leaving them without the necessary skills, or bandwidth, for an appropriate level of communications.

For the full report, please see BKCG Transparency White Paper

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Please contact us if you have any questions or would like to start a hedge fund. Other related hedge fund law articles include:

Bart Mallon, Esq. runs hedge fund law blog and has written most all of the articles which appear on this website.  Mr. Mallon’s legal practice is devoted to helping emerging and start up hedge fund managers successfully launch a hedge fund.  If you are a hedge fund manager who is looking to start a hedge fund, please call Mr. Mallon directly at 415-296-8510.

GAO Report Provides Insight into Potential Future Hedge Fund Regulation

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As we have discussed previously, hedge funds, and the investment management industry, are likely to face increasing regulations in the future.  As we look toward Congressional testimony by hedge funds (see Congress to talk with Hedge Funds on November 12) and by other government officials, we have decided to look back at previous GAO reports to see what issues the GAO identified as important.

The U.S. Government Accountability Office has released two reports this year on hedge funds.  The first report (released in February of 2008) described the current hedge fund regulatory regime and some of the risks the current system posed.  The second report (released in September of 2008) focused on some of the issues which pension plans must consider when investing in hedge funds.  I’ve provided a brief overview of the objectives of the two studies below.

Additionally, this week we are going to examine the February report as it includes many of the issues which have surfaced because of the recent market events, especially with regard to counterparty risk.  A list of the topics we will discuss this week include (links activated as soon as articles are published):

The GAO Hedge Fund Reports

Hedge Funds: Regulators and Market Participants Are Taking Steps to Strengthen Market Discipline, but Continued Attention Is Needed

GAO-08-200 Released February 25, 2008  (for full report, please see PDF)

According to the preamble, “This report (1) describes how federal financial regulators oversee hedge fund-related activities under their existing authorities; (2) examines what measures investors, creditors, and counterparties have taken to impose market discipline on hedge funds; and (3) explores the potential for systemic risk from hedge fund-related activities and describes actions regulators have taken to address this risk.”

Defined Benefit Pension Plans: Guidance Needed to Better Inform Plans of the Challenges and Risks of Investing in Hedge Funds and Private Equity

GAO-08-692 Released September 10, 2008 (for full report, please see PDF please also see an earlier article we released on this report entitled Hedge Fund and Pension Report Issued by GAO)

GAO was asked to examine (1) the extent to which plans invest in hedge funds and private equity; (2) the potential benefits and challenges of hedge fund investments; (3) the potential benefits and challenges of private equity investments; and (4) what mechanisms regulate and monitor pension plan investments in hedge funds and private equity.

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