search   Knowledge Bank printable version
 News
 Knowledge Bank
 Deal Information
 International
 Software
 Publications
 Industry Events
 Advocacy Forums
 Links
 Site Utilities
 Contributors
 Free Offers
 Home

Click here to
Update Registration
Information

Please be advised that the use of Securitization.net ®
is subject to the
Terms & Conditions

of use and the
Privacy Policy

Download

Best viewed in

Knowledge Bank > Hedge Funds
Select an area


Free Subscription for site members.

Market Risk - Investors Against Proposed SEC's Hedge Fund Rule
RiskCenter.com (September 21, 2004)

--------------------------------------------------------------------------------
Location: Stamford
Author: Alexander Smith-Ryland
Date: Tuesday, September 21, 2004
--------------------------------------------------------------------------------

The Hennessee Hedge Fund Advisory Group (Hennessee Group LLC), a global adviser to hedge fund investors, yesterday announced the findings for its 2004 Foundation and Endowment Survey, conducted for submission to the Securities and Exchange Commission ( SEC ) in response to its proposed rule requiring hedge fund management companies to register under the Investment Advisers Act of 1940.

The increased popularity of fund of hedge fund products has made it very difficult to determine the entire amount of capital that foundations and endowments have invested in hedge funds, since they are commingled with other investors. This survey was conducted to ensure that foundations and endowments are accurately represented and their opinions are conveyed to the SEC in response to its proposed registration rule.

"The survey shows that 59% of participants were in favor of the proposal requiring hedge funds to register as RIAs," stated E. Lee Hennessee, Managing Principal of Hennessee Group LLC. "However, the 30% that were against the proposed rule manage three times more capital, allocate 46% more to hedge funds, and have 50% more years of experience investing in hedge funds."

The survey encompassed 46 foundations and endowments with total assets of $44 billion. Findings of the Survey include:

  • The survey indicates that foundations and endowments that invest in hedge funds have an average of 17% allocated to hedge funds.
  • 46% of the participants started investing in hedge funds after 2000.
  • The size of the allocation to hedge funds increases with the number of years experience investing in hedge funds, not the overall size of the investment portfolio.
  • 59% of the participants are in favor of the SEC's proposal requiring hedge fund management companies to register as Registered Investment Advisers.
  • The average foundation and endowment that are in favor of registration managed $536 million versus the $1.8 billion for those that are against of the proposed rule.
  • The average foundation and endowment surveyed has been investing in hedge funds for 7 years. Those that are in favor of the proposed rule have an average of 6 years experience investing in hedge funds and those that are against have 9 years experience.
  • The participants who are in favor of the proposed rule have an average of 15% allocated to hedge funds, with 8% invested directly with hedge fund managers and the remaining 7% through fund of funds products.
  • The participants who are against the registration requirement have an average of 22% allocated to hedge funds, with 15% of the capital invested directly with hedge fund managers and the remaining 7% through fund of funds products.
For details or questions regarding the 2004 Foundation and Endowment Survey on SEC Registration of Hedge Funds, please contact Alexander Smith-Ryland of the Hennessee Group at (212) 857-4444.

--------------------------------------------------------------------------------
Article Printed From RiskCenter.com

 

 

© Copyright 2014. The Mayer Brown Practices. All rights reserved.

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the “Mayer Brown Practices”). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. “Mayer Brown” and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

Legal Notices | Attorney Advertising | Site Index | Contact Webmaster

*The site links listed on this web site are for reference use only.
The firm does not necessarily sponsor, endorse or verify the accuracy of the content contained in any of these sites.