Top Takeaways from OFA 2016

  • February 17, 2016
  • Posted by: Vincent Sarullo
  • Category: Fund Administration
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TOP FIVE TAKEAWAYS FROM THE OFA 2016 CONFERENCE

 

1. Operational and Investment Management Due Diligence is more than just checking a box.

Investors of all shapes and sizes are becoming more demanding and asking for more information during the due diligence process. Daily and position level transparency as well as regularly updated back ground checks are now part of the norm. One speaker quoted a potential investor who asked for a mirrored server so that they could monitor trading in real time. In short the more information, the better!
2. New Regulations are affecting the way manager’s manage and hold cash.
New and continuing evolving banking rules and regulations are having a significant impact on hedge fund managers and private equity fund managers ability to manage their cash balances. No longer are they simply able to put the cash in the bank account or hold it at brokerage firm. More and more managers are looking for alternatives to place their cash and are working hard with their prime brokers and banks to find solutions
3. Hacking is a prevalent and real threat to financial firms.
It is not a question of if but when your server will be hacked, both industry professionals and law enforcement folks told attendees. Cyber security is a major issue for all financial firms and needs to be taken seriously. The panel discussed best practices for avoiding a data breach but also commented that there is really nothing that can be done to stop the hackers. One fund went so far as to take all information offline and separate it from email and internet servers.
4. Investors are demanding Independent Directors with Real Fund Management Experience.
As the hedge funds industry continues to mature, investors are demanding that fund managers have independent boards of directors who have real fund management experience. Managers are realizing that this trend is a reality and as such are using firms that provide directors who have sat on trading desks, managed money and understand the markets. This is a clear shift from where the industry was just a few short years ago according to one speaker.
5. The DOJ, FBI and SEC are constantly looking to uncover insider trading schemes.
The government is focused on making sure the markets are operating fairly and is doing all it can to target those who are using various methods to game the system. The recent success at bringing to justice a number of individuals who used inside information to trade and invest is just the tip of the iceberg according to OFA’s keynote speaker Special Agent David Chaves of the FBI. The FBI is working diligently to infiltrate the network of schemers and bring the bad guys to justice.


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