Alternative Investment Management Association

AIMA Journal
The Global Forum for the Global Alternative Investment Management Industry

Q1 2010 www.aima.org No. 82

Address from the CEO Looking to the future with confidence

I
am delighted that the AIMA Journal, our flagship quarterly
publication, is back at the start of our 20th anniversary year. I
do hope you find it an enjoyable and valuable read.

It is now almost exactly a year since we, as the global hedge

fund industry association, publicly announced our support for the
principle of transparency - we said that it was desirable that all
hedge fund managers should be registered and authorised by the
authorities, and that the larger managers reported data of systemic
relevance.

If the concern of international policymakers after the crisis was that

they had insufficient information about the build-up of systemic
risks in financial markets, our response on behalf of our industry
was to offer our full co-operation in contributing to structures that
would supply them with the timely, relevant information which their best levels for a decade, we can look forward to the future
they needed to address financial stability issues. with confidence.

Our announcement came before the G20 summit in London, and it Finally, I would like to
was gratifying that the path that that summit set for the regulation pay tribute to Florence
of our industry was on these principles. Lombard, who will shortly
be stepping down as
Our work globally since then has been about working with individual Executive Director.
regulators and with supranational bodies to create the right
supervisory framework for the industry. After all, we share their It is Florence who, over
desire for improved financial stability. her many years of service,
has through the strength
Transparency is at the heart not only of the industry’s approach of her personality and the
towards supervision but also its relationship with investors. It is breadth of her vision turned
right that, with the increasing maturity and sophistication of the the association into a truly
industry and with the increasing investment in the industry by global organisation, and
institutional investors, greater transparency is both offered by for this we all owe her an
managers and sought by investors. enormous debt of gratitude.
On a personal note, I will
We believe that institutional investors now account for an absolute greatly miss working with
majority of assets under management by the industry, and that that her and I wish her every Andrew Baker
proportion is steadily increasing. This is a testimony to the success happiness in this next stage
Chief Executive Officer,
of the industry, not least in terms of offering higher returns and of her life.
lower volatility than other asset classes.
Alternative Investment
I very much hope you enjoy Management Association
There is an alignment of interests between investor and manager in reading the new AIMA
our industry that promotes sustainable and successful investment. Journal - and as always, we
With the industry once again receiving net inflows and returns at welcome your feedback.
 ADDRESS from the ceo
GLOBAL REVIEW What lies in store in 2010
By Andrew Baker, CEO, AIMA
A
IMA’s strength is that it is a global
organisation with representation
across the world. I wanted to look at
some of the key challenges we will be facing
globally this year.
EMEA
So great was our concern about the European
Commission’s (EC’s) proposed Alternative
Investment Fund Managers (AIFM) Directive
that we mobilised the industry on an
unprecedented scale to respond to it. The
original proposal from the EC had provisions
in it that would have adversely impacted the
industry globally, not just in Europe. I would
just like to take this opportunity once again
to thank all of you who have been involved
in, or supported, our campaign. It has been
extremely gratifying that the industry has
responded to this grave threat with such a
display of unity.
We have made considerable progress since the
original draft of the Directive was published
last April, and it is encouraging that the new
Spanish Presidency of the EU has said that it
will build on the good work of the Swedish
Presidency. But there is still a long way to
go. We hope that our sensible and moderate
message – that we support good regulation and
are offering our assistance to policymakers to
help them produce that – will prevail.
For more on our AIFM Directive campaign,
turn to page six.
The Americas
In the U.S, we support many of the
regulatory measures likely to be passed this
year. In common with our position elsewhere
around the world, we would welcome the
registration of managers and the reporting
of systemically relevant information by
larger managers in the U.S..
We are, however, also concerned about
regulation in the U.S. that could negatively
impact both the global industry (for
example, through ‘dual’ registration) and
the U.S. industry (for example through
2 AIMA Journal Q1 2010
disproportionate contributions to the
proposed Systemic Resolution Fund).
The House of Representatives voted on a
version of wide-ranging legislation before the
end of 2009, while the Senate has just started
to debate it. Both chambers will eventually
have to agree on a reconciled – third – version
of the legislation before it can be sent to
President Obama for his approval. And we
await further details about the President’s
banking proposals with interest.
In Canada, the implementation of National
Instrument 31-103 will mean all hedge
fund managers will have to register with
securities regulators.
Also in Canada, new accounting standards
and the implementation of International
Financial Reporting Standards will affect both
how hedge funds report their net asset values
and how they determine the values of their
underlying securities.
Furthermore, a national harmonised sales
tax on all goods and services in Canada
will affect the tax treatment of hedge fund
management fees.
Meanwhile, our National Group in the Cayman
Islands has much to look forward to in 2010. Fresh
from the positive reviews the jurisdiction has
received from the IMF and UK government and
after the Cayman Islands Monetary Authority’s
accession to IOSCO last year, Cayman in 2010
can be expected to strike yet more bilateral
agreements on co-operation and the exchange
of information with OECD member states.
At the same time, AIMA Cayman will continue
to support initiatives that enhance the
Cayman Islands’ international reputation for
openness and transparency.
Asia-Pacific
While Hong Kong’s existing robust set of short-
selling rules meant that the jurisdiction was
one of the few international financial centres
in the world not to place a temporary ban on
such activities during the financial crisis, the
authorities there are nevertheless planning
gradual changes to the regulatory system in
2010. In Hong Kong, of course, mandatory
registration and independent administration
are already cornerstones of the jurisdiction’s
regulatory system.
In Singapore, there continues to be
considerable interest from allocators.
Similarly, start-up activity there has been
strong over the last 12-18 months and this
ought to improve further in 2010 as capital
raising becomes easier. 2010 could also see
an even clearer delineation between the
boutiques and the institutional firms.
There are two noteworthy issues on the
regulatory front in Australia. First, the
Australian Taxation Office is proposing
a withholding tax policy that could
disadvantage foreign purchasers of
Australian assets. We submitted a response
to the Australian Tax Office’s Draft Tax
Determinations of December 2009 (TD 2009/
D17 and TD 2009/D18) in February 2010.
The main points made in our submission
concern the potentially negative effect for
the Australian funds industry, with regard
to the issues for offshore domiciled hedge
funds and for Australian-sourced income for
foreign investors.
And second, a short-selling regime will be
introduced in Australia on 1 April 2010 that will
see daily disclosures of positions to the regulator
and aggregated positions made available to
the market after only three days. Last year, a
working group of the regulatory committee was
formed when the ban for short selling was first
introduced. The working group has engaged
actively with regulators.
In conclusion
These are only some of the likely headlines
for 2010. But whatever arises, AIMA will
continue to argue that it is in everyone’s
interests, whether they are policymakers who
regulate or the market participants who are
regulated, that we are able to produce global
regulation of our industry that is transparent,
proportionate, consistent and workable.
 Contents

1 Address from the CEO Looking to the future with confidence

2 global review What lies ahead in 2010 around the world

5 AIMA ANNIVERSARY A look back as we turn 20

5 FLORENCE LOMBARD A tribute to her 16 years of service at AIMA

6 DIRECTIVE CAMPAIGN How our AIFMD campaign has progressed

9 REGULATORY & TAX Key updates from the Reg & Tax department

12 MEDIA EYE Media coverage of AIMA and the industry

14 WORLD VIEW News from our National Groups around the globe

15 thought leadership Tackling systemic risk by AIMA Chairman Todd Groome

16 OBITUARY The hedge fund industry loses another friend

17 irish opportunity A&L Goodbody on Ireland’s new funds legislation

18 SHORT SELLING TechInvest on the impact of Australia’s temporary ban

21 CAYMAN UPDATE Maples and Calder on Cayman’s post-crisis recovery

22 New Members AIMA members who joined in Q4 2009

24 Contact Us How to reach us

SPONSORING MEMBERS OF AIMA

PrimeFundSolutions

The AIMA Journal is published quarterly by the Alternative Investment Management Association Ltd (AIMA). The views and opinions expressed do not necessarily reflect those of the
AIMA Membership. AIMA does not accept responsibility for any statements herein. Reproduction of part or all of the contents of this publication is strictly prohibited, unless prior
permission is given by AIMA.
© The Alternative Investment Management Association Ltd (AIMA). All rights reserved.

AIMA Journal Q1 2010 3

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 aima announcements
KEY DATE AIMA to celebrate its 20th anniversary in 2010
A
IMA celebrates its 20th anniversary in
2010. Formed in 1990, the Association has
become the leading global representative
body for the hedge fund industry.
AIMA’s origins date back to the September 1990
founding of the European Managed Futures
Association (EMFA) during a gathering of 17
leading lights of the managed futures industry
at a lakeside hotel in Switzerland. They were
motivated by a concern that regulators and
policymakers were not sufficiently educated
about this type of assets. They set out with two
principal aims in mind: to campaign for better
regulation; and to educate investors, regulators
and other stakeholders about the industry. These
remain among our core missions to this day.
The Association grew steadily, and by 1997
it was re-named the Alternative Investment
Management Association (AIMA) in a move
that underscored its broader remit as
well as its global ambitions. AIMA now has
representation and offices across the world,
in the Americas, Europe, the Middle East,
Africa and Asia-Pacific regions. Its staff has
grown from less than one – Florence Lombard
Au revoir Florence Lombard to step down after 16 years with AIMA
F
lorence Lombard, AIMA’s employee
number one in every sense, and former
Chief Executive Officer, is shortly to step
down after a long and distinguished career.
Over the last 16 years, she has worked with
many of the leading lights of the hedge fund
industry. For this edition of the AIMA Journal,
we asked them to highlight her achievements.
Here is a selection of the responses we
received:
- “A tireless advocate of a balanced view of
the industry”
- “An outstanding contribution to the global
development of AIMA”
- “Her strategic vision, enlightened leadership
style and strong business and organisational
skills have enabled AIMA to emerge as a leading
industry body”
- “Demonstrated a wholehearted commitment
to the industry and its practitioners”
- “Developed outstanding relations with
regulators globally”
- “Positioned AIMA so it’s respected for its
competence and avoidance of conflicts of
was originally assured it would be only a part-
time job (see below) – to 20 current full-time
staff members.
AIMA has continually demonstrated leadership
and innovation, including creating the AIMA
Due Diligence Questionnaires, holding the first
international regulatory forum, developing
the series of AIMA Sound Practice Guides, co-
founding the Chartered Alternative Investment
Analyst Association and launching the Hedge
Fund Matrix and the Roadmap to Hedge Funds.
Much has changed since the Association’s
founding. Back in 1990, there were only about
500 hedge funds and about 80 funds of hedge
interest”
- “Showed vision to kick-start CAIA when the
industry needed it”
- “Provided members with outstanding value”
- “Helped to establish the DDQs which became
the template for many companies’ RFPs”
- “Is trusted by key policymakers and regulators
around the world”
funds globally, managing about $39 billion (about
$64 billion adjusted for inflation) in assets. At the
time, EMFA was present in five countries. Today,
the hedge fund industry is worth more than $1.5
trillion in AUM while our members comprise over
1,100 firms (with over 4,500 individual contacts)
in more than 40 countries. Our hedge fund
manager members manage in excess of 75% of
global hedge fund assets and 70% of global fund
of hedge funds assets.
It is one of AIMA’s great strengths that it is able
to speak for the whole industry globally. AIMA’s
members include hedge fund managers, fund
of hedge funds managers, prime brokers, legal
and accounting services, fund administrators
and independent fund directors. They all benefit
from our active influence in policy development,
our leadership in industry initiatives and media
engagement and our outstanding reputation
with regulators.
None of what we do would be possible without
the tremendous involvement and support of
our members, whose selfless leadership and
dedicated service to the industry over the last
20 years we salute.
- “Doing the hard yards (and interminable air
miles) to put Asia on the AIMA map”
- “Being the sort of person who makes
people want to help… and harnessing that
goodwill for AIMA”
- “Achieving it all with charm in a macho
industry”
Most recently, Florence has served as AIMA’s
Executive Director, focusing on the relationship
with governments and policy advisers
internationally. As part of her role, she has
helped lead our AIFM Directive campaign. She
will remain as a Non-Executive Director on the
Council of AIMA as well as on the Board of the
CAIA Association. She is also a Director of the
recently-launched Institute for Global Asset
and Risk Management. The hobbies listed on
her bio may also hint at the next stage of her
life – renovating properties, travel, writing,
music and the theatre.
Everyone at AIMA – and the global industry
that she has represented with such distinction
- wishes her a long and happy retirement.
AIMA Journal Q1 2010 5
 AIFM DIRECTIVE CAMPAIGN
AIFMD UPDATE How our AIFMD campaign has progressed
AIMA launched a major campaign to seek
substantial revisions to the European
Commission’s proposed Alternative Investment
Fund Managers (AIFM) Directive after the
draft legislation was published in April 2009.
The following is an overview of the key
developments with the campaign.
Please note that some of the hyperlinks in this
section are restricted to AIMA members.
Raising awareness
Whilst we support balanced and considered
regulation and indeed the broad principles
contained in the Directive, we had reservations
regarding many of its proposals and their
potential to cause unintended consequences.
The initial phase of our campaign was built
around raising awareness of the provisions
in the Directive with potentially serious
consequences for European pensions and
savings, commercial real estate, capital flows,
the competitiveness of EU financial services
and the desirability of Europe as a destination
for international investment.
Our campaign was a global one and emphasised
that the draft Directive had ramifications for EU
and non-EU fund managers, service providers
and investors. As investors such as European
pension funds became more aware of the threats
posed by the Directive, increasing numbers
began to come forward to voice their concerns.
In particular, the series of interventions by
a group of the largest pension funds in the
Netherlands, who sent letters to the European
Commission and European Parliament, helped
to expand the scope of the debate beyond the
hedge fund industry alone and gave additional
weight to our arguments.
By the autumn of 2009, a broad consensus among
influential policymakers and commentators had
emerged that the Directive as originally drafted
was flawed and required substantial revisions.
There was a good example of this when Eddy
Wymeersch, Chairman of the Committee of
European Securities Regulators (CESR), which
represents the 27 EU regulators, said in October
2009 that the draft Directive was unworkable
and needed a rethink (Reuters reported his
comments here). The success of the awareness-
raising phase of the campaign has meant that
we have been able to move to a new phase of
engagement with policymakers in order to offer
concrete, alternative solutions.
6 AIMA Journal Q1 2010
Engagement with policymakers
We have provided positive, constructive
support and specific technical assistance for
policymakers in the interests of securing the
best possible outcome for our industry.
We have stressed our positive vision for
the Directive, focusing on three elements:
registration and authorisation, reporting of
systemically relevant data and resolution of
cross border marketing issues. These elements
represented the G20 vision of regulation of the
industry, which we support. We argued that if
the Directive featured these elements it would
create a progressive framework for the industry
within the European Union that addressed
concerns raised about systemic risk issues.
Online Directive Centre
We launched our online Directive Centre in
August 2009. The Directive Centre – intended
as an important resource for members and the
media - contains everything relevant for our
campaign, including press releases, guidance
notes, FAQs and other resource materials
issued by AIMA; speeches and articles on the
Directive and links to relevant documents,
including the original draft Directive and details
of the legislative process; and a quotes section
featuring a host of different figures expressing
their opinions. You can access it here.
Campaign intensifies
Amid our phase of engagement with
policymakers, we sought to enlist as many
allies as possible. With both the European
Parliament and European Council studying the
proposals in parallel, we undertook intensive
meeting programmes with influential officials
and policymakers in Brussels and across the
EU. We met with key MEPs on the European
Parliament’s ECON (Economic and Monetary
Affairs) Committee and JURI (Legal Affairs)
Committee, and a number of Finance Ministers
from the EU Member States. AIMA’s Andrew
Baker also gave evidence to the U.K. House
of Lords committee looking at the Directive in
October – you can read a transcript of Andrew’s
testimony here.
We also launched a newsletter for European
policymakers in the fourth quarter of 2009. You
can read it here. It was a similar initiative to
the newsletter we produced for UK politicians
and civil servants earlier in 2009 and was
aimed principally at MEPs. It contained key
industry facts and figures and addressed some
of the main myths about the industry. It also
highlighted the social value provided by the
industry - citing higher returns for pension
funds and other institutional investors, job
creation and tax revenues.
Position Paper
Our signature document on the Directive, our
AIFM Directive Position Paper, was published
in September 2009. It was the first document
that we provided to Member States who sought
our technical input on the Directive and was
a substantial piece of work. You can read the
Paper here and the Executive Summary here.
Directive Rapporteur
The Rapporteur who has been guiding the
Directive through the European Parliament,
Jean-Paul Gauzès of the European People’s
Party, was appointed in September 2009,
along with several shadow rapporteurs. We
knew it would be vital that we liaise closely
with M. Gauzès and the shadow rapporteurs,
and we issued a press release congratulating
the team on their appointment and saying we
were looking forward to working with them on
the Directive. M. Gauzès produced his initial
report on the Directive in November 2009.
You can read it here, and you can read our
statement on the report here. We noted that
while there were some areas of progress which
we welcomed, there were also many others of
concern. It was notable at the time that M.
Gauzès said that his proposed changes to the
Directive were a “foundation, not a perfect
finalised” solution and there were still “a lot
of discussions to be had”.
Swedish Presidency
Sweden held the rotating Presidency of the EU
during the second half of 2009 and invested
considerable resources in finding a compromise
to the Directive. Building on from the discussions
in the AIFMD Council Working Group, which was
formed in May 2009, the Swedes issued several
compromise texts of the Directive. Their initial

text is here. You can read a media statement
we issued after the first of these texts here.
Subsequent compromise texts addressed the
issue of remuneration. The Swedes initially
proposed a requirement to defer 40% or 60%
of any bonus for three years, before amending
this to say that bonuses should be deferred
“over a period which is appropriate in view
of the life cycle and redemption policy of the
AIF concerned and is correctly aligned with the
nature of the risks of the AIF”. You can read
their 25 November 2009 text here. The section
on remuneration was on page 78, section (m).
The Swedes issued a progress report on
the Directive during the last days of their
Presidency, which you can read here. They
said that the four key remaining issues related
to depositaries, valuation, remuneration and
third country issues. They acknowledged that
there was a “high degree of convergence” of
views on the rest of the text. They also issued
a final version of their compromise text of the
Directive, which you can read here. But they
were not able to reach a final compromise
before the end of their term.
In an update to members at the time, we said
we believed that the Swedes had made useful
progress during their Presidency but given that
the issues that remain to be resolved were
extremely significant for our industry, the
crucial question would be the attitude of the
subsequent Spanish Presidency.
AIFMD - Draft timeline for 2010: European Parliament and European Council
AIFM DIRECTIVE CAMPAIGN
Interaction with MEPs
As part of our continuing dialogue with MEPs,
Andrew Baker addressed a lunch in Strasbourg
in January 2010 of the Kangaroo Group of
MEPs, which campaigns for a completion of
the single market (see their website for more
information). Andrew stressed that the industry
was keen to work closely with European
policymakers to achieve a positive result on the
Directive, and his speech was well-received.
Directive Rapporteur Jean-Paul Gauzès also
spoken at the event.
Parliamentary amendments
We produced a list of 80 preferred amendments
to the draft Directive and passed them on to
sympathetic MEPs before the 21 January 2010
deadline for submissions in order for them to
be proposed to the ECON committee. ECON
is due to begin discussing the amendments
on 22 February. Early indications are that we
have been successful in having most, if not
all, submitted to ECON.
Spanish Presidency
We held initial meetings with representatives of
the Spanish EU Presidency, both in Brussels and
in Madrid, before and immediately after the
Spanish took over the rotating presidency of the
EU from Sweden at the beginning of 2010.
The Spanish produced their first document on
the Directive, an “issues note”, on 11 January
2010, which listed the remaining issues of
contention – in line with those identified by
the Swedes at the end of their presidency. The
issues note is here. The tone of the document
is noteworthy – they say the Swedish presidency
has done a “remarkable” job - something that
concurs with what they have been telling us,
which is that they intend to continue the work
of the Swedish.
On 1 February, the Spanish authorities published
a compromise (found here). We understand that
this will be discussed at a series of meetings
of the AIFMD Council Working Group. The
negotiations on the Directive are now entering
a critical phase.
Campaign contributions
Finally, we have been delighted by the
very positive response to our request
for voluntary contributions for our AIFM
Directive campaign.
This has been the first time in the 20-year
history of the Association that we have had
to resort to such a call on our members and
we are pleased to say that we are well on
the way towards our target. It is gratifying
that the global hedge fund industry has
responded to such a grave threat with this
display of unity.
AIMA Journal Q1 2010 7
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H Full page forum Aima ad.indd 1 28/01/2010 15:53


REG & TAX A round-up of recent developments
Please note that some of the hyperlinks in this
section are restricted to AIMA members.
EMEA
AIFM Directive
For information about the Directive, turn to
the dedicated section on pp6-7.
VAT in the European Union
New rules concerning, in particular, the place
of supply of cross border business-to-business
(B2B) services came into force across the
European Union in January 2010. These rules
will not generally affect managers but may
involve an additional administrative burden,
through the requirement to submit quarterly
EU Sales Lists. Because the value added tax
(VAT) exemption for the management of
special investment funds is not harmonised,
this reporting obligation will need to be
determined on a case-by-case basis. Under the
new rules, the basic rule for B2B supplies is
that the place of supply is where the customer
is established. Where an investment manager
supplies services which previously have been
treated as taking place where the customer
belongs, those services will continue to be so
treated. It remains the case, therefore, that a
UK investment manager providing investment
management services to a Cayman fund or an
Irish fund will not need to charge UK VAT. This
Note to assist members has been prepared by
Paul Hale of Simmons & Simmons, on behalf of
AIMA’s Tax Committee.
Short selling
AIMA submitted its response to the CESR
Consultation Paper, Proposal for a Pan-
European Short Selling Disclosure Regime, on
30 September 2009. Our response included the
following points:
- There is a lack of evidence to support CESR’s
claims that short selling can/has been used
abusively;
- Whilst we support private disclosure of short
positions to regulators (subject to a sensible
threshold), we strongly oppose public disclosure
of such positions. If data is to be made public, it
should be aggregated and anonymised;
- The private reporting threshold level of 0.1%
suggested by CESR is too low. We argued that
a private reporting threshold of 2% would be
more appropriate. We also proposed a similar
level of 2% for public disclosure (in aggregated
and anonymised form only);
- A T+1 disclosure timeframe is too short,
particularly given the global nature of the
business. We consider that a T+2 timeframe,
linked to the home state regulator’s time zone,
is more appropriate; and
- A global position-based reporting regime
should be agreed.
UCITS IV
On 28 October 2009, the Committee of European
Securities Regulators (CESR) published its Advice
to the European Commission in two key areas of
the UCITS IV implementation process: level two
measures relating to the Management Company
Passport; and the format and content of the
Key Investor Information Document. For more
information, click here.
OTC derivatives
In October 2009, the European Commission (EC)
adopted a Communication which aims to ensure
efficient, safe and sound derivatives markets.
The Communication, available here, set out
future policy actions following the consultation
in July 2009 and a public hearing the following
September.
The policy actions aim to:
- reduce counterparty risk, for example by
proposing legislation to establish common safety,
regulatory and operational standards for central
counterparties (CCPs) and raising capital charges
for bilaterally-cleared as opposed to CCP-cleared
transactions;
- reduce operational risk by promoting
standardisation of the legal terms of contracts
and of contract-processing;
- increase transparency by, for example,
requiring market participants to record positions
and all transactions not cleared by a CCP in
trade repositories, regulating and supervising
trade repositories and increasing transparency
of trading as part of the review of the Markets
in Financial Instruments Directive (MiFID) for
all derivatives markets including for commodity
derivatives; and
- enhance market integrity and oversight by
clarifying and extending the scope of market
manipulation as set out in the Market Abuse
Regulatory and taX
Directive to derivatives and by giving regulators
the possibility to set position limits. The EC
stated that the proposals will be in line with
the objectives agreed by the G20 and confirmed
that it is willing to work with authorities in other
nations to avoid the risk of regulatory arbitrage.
U.K. Financial Services Bill
The Financial Services Bill 2009-2010,
introduced to the House of Commons on 19
November 2009 and amended during the
committee stage, has several provisions which
may be relevant to U.K.-based hedge fund
managers, including: new powers for the
Financial Services Authority (FSA) to impose
short selling restrictions; powers for the
FSA to develop rules on requiring regulated
firms to create and maintain recovery and
resolution plans (known as “living wills”);
provisions providing powers to implement the
recommendations of the Walker Review on
remuneration; and the creation of a Council
for Financial Stability to oversee systemic risk.
Details of the bill can be found here.
Bank Payroll Tax
The U.K. HM Revenue and Customs (HMRC)
issued a short statement on 18 December 2009
clarifying the application and scope of the Bank
Payroll Tax (BPT) announced in the Pre Budget
Report of 9 December. The HMRC statement
confirmed that stand-alone asset managers
would not be affected by the tax. However, it
seemed clear that, for businesses which are a
division of a bank or a subsidiary of a banking
group, it would be a matter of assessing on a
case-by-case basis whether the tax applies in
the case of employees to whom bonuses are
to be paid. For more information on the HMRC
statement, click here. For HMRC’s frequently-
asked questions, click here.
Funds Investing in
Non-Reporting Funds
HM Treasury (HMT) published draft regulations
for Funds Investing in Non-Reporting Funds
(FINROFs), relating to the awaited FSA’s Funds
of Alternative Investment Funds (FAIF) regime.
Click here for more information.
(continued on page 10)
AIMA Journal Q1 2010 9
 Regulatory and taX
(Continued from page 9)
Takeover Code
The Takeover Panel issued Response
Statements on 16 December on Extending the
Code’s disclosure regime and Miscellaneous
Code amendments, further steps in its
consultation by PCP 2009/1 of May and PCP
2009/2 of July 2009. Click here for more on
both statements.
Our response to the consultation supported
the opening position disclosure and
extended composite disclosure requirements
(provided they were efficiently advised to
the market) and called for further industry
consultation before any further steps in
relation to the securities borrowing and
lending disclosure proposal.
FSA fees and levies
AIMA submitted a response to the FSA
Consultation Paper, Regulatory fees and
levies: policy proposals for 2010/11. We
made these main points on the proposed
shift to an income-based fee measure:
- it would, effectively, penalise small firms
who charge performance fees and who,
typically, have a small number of larger
clients (funds) and relatively few approved
persons;
- it could result in a much less reliable basis
for the FSA’s fee income as firms’ incomes,
especially performance fees, are volatile;
- the FSA should await testing of the income
measure under FSCS in 2011, the implementation
of RDR in 2012 and further analysis of likely
costs impact before any decision is taken to
proceed further with this proposal. Our full
response can be found here.
Offshore Funds
HMRC published the Offshore Funds (Tax)
(Amendment) Regulations (SI 2009/3139) in
December 2009. The Regulations are available
here, accompanied by an Explanatory
Memorandum.
Financial services remuneration
The FSA issued a feedback statement (FS09/5)
on 8 December 2009 with the welcome decision
not to extend its code on remuneration policies
10 AIMA Journal Q1 2010
to other FSA-authorised firms, nor to introduce
any new rules on remuneration for the time
being. In issuing its feedback, however, the FSA
said that it would review the effectiveness of the
remuneration code in mid-2010, when it would
consider the lessons learned from last year’s
exercise. Click here for more information.
Short selling disclosure regime
On 1 October 2009, the FSA issued its feedback
statement (FS09/4) on its February 2009
Discussion Paper (DP09/1) regarding the
long-term treatment of short selling. FS09/4
confirmed that the FSA’s preferred policy
approach remained substantially the same as
set out in DP09/1.
Turner Review
On 30 September 2009, the FSA published a
feedback statement on the Turner Review and
its associated discussion paper (DP) of the
previous March. In its feedback statement,
available here, the FSA noted that the key
concerns raised by respondents were: (a) the
importance of an international approach when
looking at policy options; (b) that any measures
implemented by the UK alone could damage
London’s competitiveness; (c) large firms were
against increased requirements for systemically
important firms; and (d) the need for an impact
assessment of the ‘whole package’ of reform to
be carried out.
HMRC/HMT Seminar
AIMA gave a seminar to more than 50 officials
from HMRC and HMT. The seminar was an
opportunity for HMRC and HMT to gain an
increased understanding of the issues that are
important to the hedge fund industry, and for
open discussion of relevant matters.
UK liquidity requirements
The FSA published its final rules on the liquidity
requirements expected of firms in November
2009. The provisions set out in the rules include:
(a) an updated quantitative regime coupled
with a narrow definition of liquid assets; (b)
over-arching principles of self-sufficiency and
adequacy of liquid resources; (c) enhanced
systems and controls requirements; (d) granular
and more frequent reporting requirements; and
(e) a new regime for foreign branches that
operate in the UK. The FSA is running briefing
sessions in London and Edinburgh on the new
liquidity requirements, with emphasis on the
implications of the rule changes and how firms
are expected to comply. More information and
a booking form is here.
AMERICAS
Tax Extenders Act 2009
The U.S. Tax Extenders Act was passed by
the House of Representatives on 9 December
2009 and including the Foreign Account Tax
Compliance Act (FATCA) and Taxation of
Carried Interest as Ordinary Income) would,
if enacted, have a substantial impact on the
fund industry. Its provisions include those
to: (1) increase withholding and reporting
obligations on payments made to certain non-
U.S. persons, including investment funds; (2)
subject certain gross payments to non-U.S.
persons made on specified Notional Principal
Contracts to a 30% withholding tax; and (3)
tax at ordinary income rates income earned on
“incentive allocations” or “carried interest”
by partners providing investment management
services to certain partnerships.
Registration and reporting
The House of Representatives passed the Wall
Street Reform and Consumer Protection
Act (H.R. 4173) in December 2009. The bill
included proposals for financial regulatory
reform, protection of consumers and investors,
insurance issues and regulating the over-the-
counter derivatives markets. It may mean that
other proposals on derivatives (from the House
Financial Services and Agriculture Committees
and from Senator Christopher Dodd, chairman of
the Senate Banking Committee) may not proceed.
For more information, click here.
SEC Custody Rules
The U.S. Securities and Exchange Commission
(SEC) published a change to Rule 206 of the
Investment Advisers Act of 1940 applicable to
SEC-registered investment advisers and coming
into effect on 12 March, relating to custody of
clients’ assets. The rules seek to address issues
highlighted by the Madoff scheme in respect of
investment advisers retaining custody of client
assets. For more information, click here.
 AIMA SPONSORING MEMBER

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 Press Clippings
MEDIA EYE International press coverage of AIMA and the industry
AIMA and the global industry we represent
receive regular and widespread media
coverage in Europe, the U.S. and around
the world. The following are some edited
highlights, with hyerlinks to the relevant
articles and broadcast clips, of the press
coverage AIMA and the industry received
during the latter part of 2009.
Please note that some of the hyperlinks in this
section will be restricted to subscribers of the
relevant publications.
AIFM Directive
The Alternative Investment Fund Managers
(AIFM) Directive dominated much of the
coverage of AIMA and the industry during the
latter part of 2009.
The coverage included the following highlights
(note: some of the publications listed may
require subscriptions):
- AIMA’s Andrew Baker appeared on World
Business Report on BBC1 and BBC World in
September 2009 to talk about the Directive.
And we also recorded a TV clip of Andrew
talking about the directive for our Directive
Centre on our website. You can see it here.
- The results of a survey of AIMA members by
independent think-tank Open Europe drew
widespread media coverage. The survey
concluded that the Directive could cost of the
alternative investment industry $2.8 billion in
its first year and $1.4 billion a year thereafter.
The news was covered by, among others,
Bloomberg, Reuters, the Daily Telegraph,
and City AM.
- In October 2009, Andrew discussed the
progress of the campaign thus far in Hedge
magazine and he considered the implications
of the Directive on pension funds and other
institutional investors in Pensions Insight.
The campaign also hit the airwaves, with
Andrew a regular fixture on TV and radio
reports, including this discussion on BBC
Radio 4’s World At One programme.
- Later in October, HFM Week quoted Andrew
expressing concern that the hedge fund
industry would only have a sole representative
at an important hearing of the European
Parliament’s Economic and Monetary Affairs
Committee on the Directive.
12 AIMA Journal Q1 2010
- U.K. newspapers the Sunday Telegraph
and City AM fought a campaign against
the Directive. In this article to kick off its
campaign, the Sunday Telegraph quoted
Andrew Baker extensively and said that we had
led the lobbying effort against the proposal.
Telegraph head of business Damian Reece
called for “reform” here.
- The then Swedish Presidency of the European
Union published its proposed compromise
text for the Directive in November 2009. AIMA
issued this statement to the global media; we
also then issued a separate comment on the
remuneration annex within the new Swedish
text, expressing our concern. This was
reported by the Financial Times, Bloomberg,
Reuters and Global Pensions.
- Andrew Baker gave evidence about the
Directive to the U.K. House of Lords, and the
full transcript of the hearing was published by
the Hedge Fund Journal.
- In December 2009, Directive rapporteur
Jean-Paul Gauzes published his proposed
amendments to the draft legislation. AIMA
gave its initial response to the report in this
media statement. The news was reported by
a wide range of international and industry
publications, many of which carried elements
of AIMA’s media statement. The coverage
included Hedge Funds Review, Opalesque,
Hedge Fund Journal and EurActiv.
- Even a European Parliament-commissioned
study questioned the rationale behind the
Directive and argued that the legislation
could reduce the annual growth rate of the
EU by as much as 0.2%. The news, including
AIMA’s response, was carried by a number
of media outlets including the Wall Street
Journal and the Financial Times.
- Our campaign drew praise from a variety
of quarters, including Hedge Funds
Review, which said in December 2009 that
the association had “risen to new heights”
and was fighting a “sustained and fairly
effective campaign”.
- In this article, columnist Simon Osborne of
magazine Asian Investor supported our policy
of constructive engagement with policymakers
on the Directive.
- We have fought a global media Directive
campaign. In October, AIMA Canada’s Gary
Ostoich told Reuters that the Directive could
have a major impact on Canada’s hedge fund
industry. This statement came after the release
of press releases in local markets around the
world that set out the considerable impact of
the Directive beyond the EU’s borders.
- The possible impact of the Directive on
the Hong Kong hedge fund industry was
reported by China Daily and the Hong Kong
Economic Journal, while Bloomberg assessed
the Directive’s impact on Singapore and Hong
Kong and Super Review magazine of Australia
reported that the Directive would affect
Australian fund managers.
U.S. media coverage
The latter part of 2009 was of course marked by
a series of proposed legislative changes in the
U.S.. These proposals culminated in December
2009 with House of Representatives voting in
support of a wide-ranging Wall Street Reform
Act. The Senate is currently considering its
version of the eventual legislation.
As well as engaging with policymakers in
the U.S., AIMA released media statements
relating to the proposals on Capitol Hill. In our
communications, such as this press release,
we reiterated our support for the registration
of U.S.-based hedge fund managers and the
reporting of systemically relevant data to the
SEC. But we made clear that we were worried
about the potential for excessive reporting
requirements overwhelming both regulators
and managers.
In this media statement, we expressed
concern that the asset threshold for the
proposed Systemic Resolution Fund – a pool
of capital that would be used to rescue firms
deemed too big to fail - would be set at $10
billion for hedge funds yet $50 billion for all
other financial institutions and we called for
a fairer and more proportionate measure.
This was picked up by a number publications
including HedgeCo.net, Hedgeweek, the
Hedge Fund Journal and Opalesque.
Meanwhile, we conducted a series of
interviews with U.S. media organisations. The
most extensive of these saw AIMA Chairman
Todd Groome interviewed at length by the
Hedge Fund Law Report in November 2009.
 Press Clippings

Todd was invited to discuss some of the big
issues facing the global industry including
regulation, disclosure, dual registration and
short-selling.
In brief
Todd Groome profile: Hedge Funds Review
published a profile of AIMA’s Todd Groome, which
reflected on Todd’s long career, his aspirations
for AIMA and his views on the industry.
Ex-Chairman wins award: Hedge Funds
Review reported that AIMA Council member
and former AIMA Chairman Christopher
Fawcett, senior partner at Fauchier Partners,
had won the 2009 European Long-term
Achievement in Fund of Hedge Funds award.
Hong Kong anniversary: The Hong Kong
Economic Times carried a full-page piece
marking the 10th anniversary of AIMA Hong
Kong in November 2009 with messages and
articles by AIMA Hong Kong’s Christophe Lee,
Financial Secretary John Tsang, Simon Galpin
of InvestHK and Robert Ray of CME Group.
Hong Kong survey: A survey by AIMA Hong
Kong that found the local hedge fund industry
employed about 4,000 people was reported
by Bloomberg in November 2009.
Hong Kong market: The Asset magazine
carried a lengthy article about the Hong Kong
market based on an interview with AIMA Hong’s
Christophe Lee.
Short selling: The Guardian reported in
October 2009 that investors would have to
disclose their short-selling positions in every
European company under EU proposals backed
by the FSA. Andrew Baker was quoted as saying
the reporting threshold had been set too low.
And Opalesque in November 2009 published a
round-up of reforms to short-selling and other
regulations in various jurisdictions around the
world that carried statements by Andrew
Baker and AIMA Australia’s Kim Ivey.
Singapore regulation: Hedge funds in Singapore
would “almost certainly” need to be licensed as
the central bank seeks to tighten regulation of
the industry, AIMA Singapore’s Michael Coleman
told Bloomberg in October 2009.
Post-Madoff: AIMA Canada’s Gary Ostoich
was among the Canadian hedge fund industry
professionals quoted in a Reuters piece about
how the industry was rebuilding trust with its
clients after the Madoff affair.
AIMA Canada event: The outcome of an
AIMA Canada luncheon event in Toronto was
reported on by Reuters.
Cayman seminars: AIMA Cayman’s launch in
November of a number of seminars looking
at the key elements of an investment fund
from a director’s perspective was covered by
Cayman Net News.

CAIA ASSOCIATION NEWS

Designation for AI professionals recognised worldwide

I
n 1999, there was no global standard of knowledge for the
alternative investment industry. AIMA helped change that in 2002
when it joined with CISDM (Center for International Securities
and Derivatives Markets) to co-found the Chartered Alternative
Investment Analyst (CAIA) designation program.
Today, just eight years later, more than 3,500 financial
professionals worldwide, many from AIMA member companies,
have earned their CAIA designation. More will join the CAIA roster
after this year’s two exam cycles – in March and September
2010. Members include a variety of professionals such as portfolio
managers, financial planners, institutional investors, consultants
and regulators. Their growing interest in creating AI communities
has helped launch 11 CAIA chapters worldwide, including
chapters in London, Hong Kong and Germany.
As membership and reputation grow, the CAIA Association, which
is the sponsoring-body of the designation, has reached a milestone
in its efforts to maintain the currency of its program. Candidates
sitting for Level I and Level II exams in March 2010 will be the first
to use the newly published CAIA Alternative Investment Knowledge
Series. The series covers the information and associated skills
required for all professionals working with alternative investments,
while allowing for the inclusion of future updates on a timely basis.
The series is the result of collaborative work with CAIA members,
industry experts, and academics, including Mark Anson, Ernest
Jaffarian, François-Serge Lhabitant, Thomas Meyer, Pierre-Yves
Mathonet, Richard Spurgin, and David McCarthy.
A mini quiz on the CAIA.org website allows AI savvy professionals to
test their knowledge before deciding on whether the program will
add to their level of professionalism. Employees of AIMA member
companies who are interested in taking the September 2010
exams are encouraged to sign up early in order to secure the early
registration discount. Registration for the September exams will
open in early April 2010.

As a founding sponsor of the Chartered Alternative Investment Analyst (CAIA) Association, AIMA is able to offer member
companies exclusive discounts on CAIA examination and membership fees.

Employees of AIMA member companies are eligible for a 25% discount off the standard CAIA examination fees, and receive 60%
off their first year of CAIA membership. For more information, see here.

AIMA Journal Q1 2010 13

 AIMA National Groups
WORLD VIEW News round-up from AIMA’s National Groups around the world
AIMA is the only truly global hedge fund
association. As a global organisation, we are
uniquely positioned to address industry issues
from a worldwide perspective.
During the latter part of 2009, our various
National Groups around the world worked
on a wide range of initiatives. Please note
that some of the hyperlinks in this section are
restricted to AIMA members.
AIMA Australia
AIMA submitted a response to the Australian Tax
Office’s Draft Tax Determinations (TD 2009/
D17 and TD 2009/D18) in February. The main
points in our submission concern the potentially
negative effect for the Australian funds industry,
with regard to the issues for offshore domiciled
hedge funds and for Australian-sourced income
for foreign investors. We hoped that the
recommendations for change made by the
Australian Finance Centre Forum in its report
released by Ministers on 15 January, including
an ‘investment manager regime’ to provide
non-resident investors with a tax exemption in
respect of investments in foreign assets through
intermediaries, would be taken up.
AIMA Australia also updated members about
a short-selling regime that will be introduced
on 1 April. The new system will see daily
disclosures of positions to the regulator and
aggregated positions made available to the
market after only three days.
AIMA Canada
AIMA Canada updated members on regulatory
and tax developments. Instrument 31-103,
which will affect many areas of the Canadian
alternative investment industry, was put into
effect by Canadian Securities Regulators at the
end of September 2009.
To help address some of the questions and
issues surrounding the new requirements and
deadlines, AIMA Canada’s Legal and Finance
Committee produced a special section on
AIMA Canada’s website, called Registration
Reform NI 31-103.
AIMA Canada explained to members that
Ontario and British Columbia would harmonize
their old provincial taxes on goods with the
14 AIMA Journal Q1 2010
AIMA has branch offices and National Groups around the world
federal Goods and Services Tax (GST) from 1
July 2010. The result will be an increase in
taxes on fund management fees, rising from
5% to 13% and 12% respectively. In addition,
new rules came in at the start of 2010 which
levelled the playing field between funds based
in provinces having the higher melded tax rate,
and those having the lower tax rate under the
old provincial systems.
Meanwhile, AIMA Canada sponsored the sixth
Annual Hedge Funds Care Canada gala at the
Royal Ontario Museum, Toronto in November
2009. The event helped push the charity to
over the $1 million mark in terms of funds
raised to prevent child abuse and neglect.
AIMA Cayman
AIMA Cayman launched a series of seminars
for independent directors of hedge funds
during the latter part of 2009. The events
also provided the local industry with useful
networking opportunities.
AIMA Hong Kong
AIMA Hong Kong liaised with the Securities and
Futures Commission (SFC) regarding the SFC’s
consultation paper on Short Selling Position
Reporting and issued a response. AIMA Hong
Kong also responded to the Financial Services
and the Treasury Board’s consultation paper on
Proposed Anti-Money Laundering Measures.
AIMA was delighted to welcome Philip Tye,
Partner and Chief Operating Officer of
DragonBack Capital in Hong Kong, on to our
Council (Board of Directors). Mr Tye has been
a senior fixture of the Asian finance industry
for the past 14 years. He co-founded
DragonBack in 2007 with his two partners.
Previously, he was the Chief Financial Officer
of PMA, one of Asia’s biggest hedge fund
managers. He has also held senior positions
with Credit Suisse.
Meanwhile, AIMA Hong Kong formally celebrated
10 years in the jurisdiction in November 2009
with a cocktail reception at the Hong Kong
Club. The event attracted a large gathering of
participants, including representatives from
the local hedge fund industry and international
guests, officiated by Financial Secretary John
Tsang. The event was sponsored by InvestHK,
CME Group, Thomson Reuters, Prime Fund
Solutions and Ernst & Young.
AIMA Singapore
AIMA Singapore carried out a survey of its
members and released the findings to the
media. Among the survey’s findings were
that Singapore is home to around 140 single-
strategy and about a dozen of funds of hedge
funds. It was discovered that Singapore-based
hedge fund firms had about $35 billion in assets
under management (or about $300 million on
average). In addition, the survey estimated
that the local hedge fund industry employs
more than 800 professionals.
On the regulatory front, AIMA Singapore
consulted AIMA members regarding the
draft criteria for a new licensing regime for
the jurisdiction proposed by the Monetary
Authority of Singapore (MAS).

REGULATION Tackling systemic risk
By Todd Groome, Chairman, AIMA
Policymakers looking to improve systemic risk and financial stability
analysis need to identify the key drivers of systemic risk, develop a
practical and effective reporting system for systemically-relevant
information, and gather such data in an efficient manner from a
targeted group of financial institutions from all sectors. The hedge
fund industry is prepared to contribute to that analysis and process.
I
n the emerging sphere of supranational macro-prudential
supervision, an important debate is progressing among
global policymakers. Throughout the G20, policymakers and
practitioners are attempting to solve one of the fundamental
challenges posed by the recent crisis: how to construct a global
system of oversight and supervision capable of identifying the build-
up of excesses and stresses in the financial system, and how best to
address such warning signs in a timely and effective manner. The goal
is to mitigate systemic risk and market melt-downs, and the related
negative effects on the real economy.
What are the key drivers of systemic risk or financial instability? This
is an important starting point, and as fundamental as it seems, many
policymakers today do not agree on the drivers or how to define
these terms.
Let’s assume that financial instability is more than market volatility
or individual firm failures, but involves such extreme volatility and
market disruptions that key markets cease to function, including in
particular the failure of core financial functions such as the provision
of liquidity and credit. Such extreme events are often the product
of strong procyclical forces, exacerbating market or economic
adjustments, and the stakes are even higher today given the increased
inter-connectedness of global financial markets and institutions.
Thus, an important policy goal must be to better understand market
dynamics, and to develop policies that reduce or modify a variety
of procyclical forces in markets (eg, fair value accounting, over-
reliance on risk-based capital and VAR-type models, and increasingly
common risk management models and practices within and across
sectors), as well as the resulting procyclical behaviour of a broad
group of market participants. Policy adjustments can reduce these
procyclical drivers and facilitate more diverse market behaviour, and
thus improve financial stability by reducing the “crowded response”
to market shocks.
It is widely acknowledged today that hedge funds were not a cause
or a contributor to the systemic events of 2008. Indeed, hedge funds,
as an important contributor to market liquidity and price discovery,
typically provide important stabilizing and counter-cyclical influences to
a variety of markets. The diversity of investment strategies and trading
styles evident in the hedge fund industry provide important market
stability to the frequent herding behaviour evident in many traditional
investment management and banking activities.
For these same reasons, it is quite logical, even necessary, that
hedge funds contribute to the supervisory analysis of markets and
systemic risk.
THOUGHT LEADERSHIP article
Improving transparency
A fundamental premise underpinning current policy discussions is a
desire to improve transparency; both at the market and counterparty
level, and with and among supervisors. As a matter of principle, this
basic premise and goal should be supported.
The global hedge fund industry, through the Alternative Investment
Management Association (AIMA), its global association, in February
2009 (in advance of the G20 Finance Ministers meeting in London),
announced its support for a variety of policy initiatives focused on
improving transparency, including mandatory manager registration
and the periodic reporting by larger managers of systemically-relevant
information to supervisors and other macro-prudential authorities.
We understand that this could bring additional challenges, including
the risk of creating structures that may foster regulatory overload. As
such, it is important that (i) a macro-prudential or financial stability-
oriented reporting system be applied consistently on a global basis, (ii)
only institutions that can practically contribute to this analysis should
be asked to incur the costs of doing so, (iii) supervisory capacity needs
to exist to effectively use this information, and (iv) all financial sectors
and relevant market participants are required to contribute.
Supervisory framework
AIMA has been working with major national and supranational
authorities to develop such a supervisory framework throughout 2009,
and most supervisory authorities appreciate the challenges inherent in
devising a reporting system for systemically-relevant information. The
data gathered needs to be relevant to the risks we seek to mitigate,
and it must be understood that neither the public nor the private sector
can draw on infinite resources in this regard. Take a practical example:
supervisors would gain little from scrutinizing every position taken by
a hedge fund manager, or any other market participant. A reporting
system seeking to gather too much information is more likely to conceal
the building-up of risks than to uncover them, since red flags may
remain hidden under a mass of data. Indeed, it is important to observe
and understand the larger picture, including market and institutional
linkages, in order to evaluate systemic risks.
The primary goal of such reporting is to improve the supervisory
understanding of market dynamics, not to interfere in markets or to
seek a “zero-failure” regime. However, the crisis has again raised
questions over one of the guiding principles of prudential supervision,
that of “non-zero failure.” Policy-makers should recognize that they
will not be able to prevent all failures; nor is that a desirable goal. In
an efficient and functioning market, some firms will fail, so the focus
should be on creating brakes, buffers, or barriers in the system to
prevent cascading failures, as well as the means to efficiently reallocate
capital to more productive uses. As a practical matter, based on a
variety of growing fiscal pressures, many governments may also be
increasingly unable or unwilling to pursue large bailouts and related
stimulus programs.
(Continued on page 16)
AIMA Journal Q1 2010 15
 thought leadership article
(Continued from page 15)
Previous G7 and Financial Stability Board (FSB) studies did not find
unique systemic risks created by hedge funds; in general or vis-a-vis
their systemically important bank and broker counterparties. And
as concerns herding behavior, hedge fund managers by design look
for value and opportunity away from the herd, as part and parcel of
their efforts to generate investment outperformance. Indeed, on this
issue, supervisory efforts may be better spent evaluating the market
behaviour of other market participants.
Risk analysis
What type of information should be gathered? Supervisors should
consider a range of issues, and look beyond the popular focus on
leverage. It is worth noting that the historic peak of average hedge
fund leverage, set in 2006, was $2.90 for every dollar invested
(2.9 times assets), according to Credit Suisse - a miniscule level
compared to the 30-50 times leverage employed by some of the
biggest banks at that time.

A few statistics may be instructive. The entire hedge fund industry
manages assets worth about $1.5 trillion today. It may seem a
large number, but the broader asset management industry is vast
– around $62 trillion in assets under management by some estimates.
By that measure, hedge fund firms manage a little over 2% of all
professionally-managed assets. Of course, some banks manage more
assets than the entire hedge fund industry, and do so with much
greater leverage.
Nevertheless, hedge funds should not – and do not - fly under the
radar. Improving financial stability means empowering supervisors to
take a holistic view of the financial system. While hedge funds – and
this is an important distinction - are not systemically “important”
institutions based on the risk they pose to the financial system or the
core services they provide, as mature market participants our industry
can and should contribute to financial stability analysis by providing
public authorities with systemically “relevant” information. It should
also be noted that many of the largest hedge fund managers have
been voluntarily sharing market and risk management information
with national and international authorities for many years.
Which hedge fund managers should be asked to provide such
information to supervisors? One criteria (not the only one) should be
assets under management – with managers having more than $1 billion
in AUM, for example, required to comply with enhanced reporting
requirements. This would capture about 325 managers and about
80% of assets managed by the global hedge fund industry; providing
both practical and relevant coverage. In this way, supervisors should
gain a useful view of market activity via the window of hedge fund
managers, including market trends and the possible build-up of various
types of risks across the financial system and sectors.
During 2007 and 2008, the average leverage employed by hedge
funds was much lower. To better understand market and system
risks, supervisors need to evaluate a variety of risk factors, such as
(i) portfolio or balance sheet concentrations, (ii) historic and current
volatility levels across markets, (iii) very importantly, liquidity
conditions on both sides of the balance sheet, and (iv) leverage
levels, on and off-balance sheet, across institutions and sectors.
Understanding these risk factors, especially liquidity conditions,
should be of primary importance and produce a better analysis
of systemic risk. This is also the type of risk analysis (in general
terms) that major hedge fund managers conduct on a regular basis,
and possibly why numerous observers have concluded that risk
management systems at major hedge funds are typically of the
highest standard.
Policymakers and regulators are not alone in the desire for
greater financial stability; it is in the interests of everyone
operating in financial markets and the broader economy, including
the alternative investment community. The G20, the FSB, the
International Organization of Securities Commissions (IOSCO)
and national supervisors have made a significant commitment to
improve financial stability.
As part of the new regulatory framework, the hedge fund industry and
AIMA are working closely with national and international supervisory
authorities, and fully support their efforts to create an effective
global macro-prudential system and reduce systemic risk. Otherwise,
we could all be left in the dark... again.
An abridged version of this article appeared in the Financial
Times’ FTfm supplement

OBITUARY Hedge fund industry loses another friend

By Florence Lombard, Executive Director, AIMA

P
aolo Cristofolini, a veteran of the
European hedge fund industry and a
member of AIMA for many years, was
killed by an avalanche in Verbier, Switzerland
on 3 January 2010.
Paolo was a personal friend of mine of more
than 25 years. Together in 1989, before AIMA
was even thought of, under a joint venture
between Bearbull Asset Management and
Elders Finance Group, we had established
the first ever European fund of hedge funds,
incorporated in Guernsey. Paolo went on
to set up Commodities Corporation, which
became the Geneva arm of Goldman Sachs
Asset Management, then Agora Capital
Management. He also created a wine
investment fund and was on the board of, or
advised, several of our member companies.
He will be missed by all those who knew him.
Personally, I will always remember him for
his extraordinary energy, passion for life and
the industry and how several years ago he
had beaten a cancer scare with good humour.
Our sincere condolences go to Paolo’s family
and his many friends.
It has been a sad year for the European
hedge fund industry, which has lost several
other ‘old’ friends, including Gilles Halna
du Frètay, Tony Stocks, Thierry de la Ville
Huchet, Jean-Pierre Aguilar and Steven
Krampf to name but a few.

16 AIMA Journal Q1 2010

 from our members
From our members
We encourage all of our Members to contribute to the AIMA Journal. Anyone wishing to do so is invited to contact
the Coordinator of the Journal, AIMA Communications Officer Dominic Tonner, at dtonner@aima.org, or the Editor,
AIMA Director of Communications Christen Thomson, at cthomson@aima.org. We look forward to hearing from you.
IRISH OPPORTUNITY New Irish legislation will enable offshore fund companies
to migrate into Ireland
By Brian McDermott and Nollaig Greene, A&L Goodbody
I
reland has enacted new legislation to enable fund companies to
migrate into Ireland and be registered as Irish regulated funds
without any change in the legal entity. The process aims to
maximise efficiency and to minimise any regulatory, tax or other
burdens on the migrating company.
This new procedure will enable funds structured as companies to
convert to EU regulated funds, enjoying the market advantage of
recognised investor protection safeguards (such as independent
custody and administration, including valuation). Migrating funds
will have the flexibility to structure as UCITS (with the benefit of the
UCITS passport), or as Irish Qualifying Investor Funds (with the benefit
of greater flexibility in investment options). Other reasons why funds
may migrate to Ireland would be to position themselves to deal with
the potential challenges presented by both the AIFM Directive (such
as the marketing of non EU funds in the EU) and OECD and EU tax
initiatives affecting traditional offshore fund domiciles.
Ireland is estimated to service over 40% of global alternative
investment funds as at October 2009. As at June 2009, Ireland had
€1.4 trillion in total fund assets under administration, €650 billion
of which are in non-domiciled funds and €703 billion in domiciled
funds, according to the Irish Funds Industry Association. Many offshore
funds are already serviced in Ireland and many fund promoters and
investment managers may already have established funds in Ireland
and will be familiar, and comfortable, with the jurisdiction.
To facilitate the migration of fund companies into Ireland, the
Companies (Miscellaneous Provisions) Act 2009 (the Act) was signed
into law on 23 December 2009. It includes provisions which will enable
existing offshore fund companies to re-domicile to Ireland. This will be
an alternative to such companies merging, or entering into a formal
scheme of amalgamation, with a successor Irish fund company (which
has, up until now, been the preferred method for fund companies to
move to Ireland). The new process ensures that there is no change in
the legal entity and thus investors remain shareholders in the same
entity. This should:
- Ensure there is no chargeable event for the fund or its investors as a
result of the migration as it will not involve a sale or transfer of assets
or shares;
- Eliminate or significantly reduce stamp duties, other taxes and
other costs relating to the migration as there will be no change in the
beneficial ownership of the fund’s assets;
- Minimise delays and unnecessary paperwork;
- Make it easier to use the track record of the fund for marketing
purposes.
The Irish limb of the process will be quite streamlined. It should, in
summary, involve a single filing of registration documentation with
each of the Irish Companies Registration Office and the Irish Financial
Regulator.
The following are the key steps and requirements:
- The migrating fund will apply to the Irish Registrar of Companies to
be registered in Ireland by way of continuation of existence.
- The application will be signed by a director of the migrating fund
and will be accompanied by the prescribed registration documents
(which will include a director’s statutory declaration in respect of
the migrating fund and a declaration as to its solvency) as well as a
further declaration as to compliance with the Act’s requirements by a
solicitor or director.
- The migrating fund must have obtained confirmation from the
Irish Financial Regulator that it proposes to authorise the applicant
(whether as a UCITS or a non UCITS). This will mean that any migrating
fund will have to comply with all of the relevant requirements of
the Irish Financial Regulator. We anticipate that the finalisation of
documentation for the Irish Financial Regulator and the Irish Registrar
of Companies will run in parallel.
- The migrating fund must be solvent with no action pending to wind it
up or to appoint a liquidator to it.
- Notice of redomiciliation must be served on the creditors of the
migrating fund.
- Any necessary contractual consents must be obtained by the
migrating fund.
- The migration process will be subject to compliance with the
relevant legislative and regulatory requirements in the country of
origin of the migrating fund and to compliance with the requirements
of the constitution of the migrating fund.
(Continued on page 18)
AIMA Journal Q1 2010 17
 from our members
(Continued from page 17)
We anticipate that the Irish Registrar of Companies will register the
migrating fund and the Irish Financial Regulator will authorise the fund
on the same day. From the date of registration the migrating fund
company shall be deemed to be a company formed under the Irish
Companies Acts. Following such registration, the migrated fund must
then apply to be deregistered in its country of origin.
By enacting this legislation in a short timeframe, the Irish Government
SHORT SELLING Impact on Australian stock prices
By Emily Stewart, Rick Steele, Ashley Young, TechInvest Pty Limited
Introduction
A
s a result of declining stock prices and increased volatility
on the Australian Securities Exchange (ASX), the Australian
Securities and Investments Commission (ASIC) placed a
temporary ban on both naked and covered short selling of securities,
effective 22 September 20081. The ban was subsequently lifted on
non-financial stocks on 19 November 20082, on the condition that
brokers report their gross short sale positions to the ASX, which is
subsequently released to the public at 9am the following day in the
form of a Daily Gross Short Sales Report. Throughout the period of the
ban, restricted stocks were shorted as allowed by limited, authorised
market-makers. Following numerous reviews of the short selling
restrictions, which resulted in maintaining the ban on restricted stocks
due to continued market volatility3, ASIC finally lifted the ban on the
remaining financial and selected stocks on 25 May 2009.
Australia was one of the few developed countries to have continued
to impose short selling restrictions on financial stocks and the only
major developed market to have imposed a short selling ban on both
4
financial and non-financial stocks . The restrictions were placed with
limited available evidence on the impact of short selling on stock
prices.
The following examines whether, over the period that the ban was
partially lifted, there is a relationship between reported short selling
and stock price movements. The models developed are intended to
be explanatory as opposed to predictive models, designed to explore
whether there is any support for the populist argument that short
selling has affected stock price declines.
Method
Data sample:
This study is based on the stocks comprising the S&P/ASX 20 as at 19
November 2008. The S&P/ASX 20 represents the 20 largest stocks by
market capitalisation, which as at 19 November 2008 constituted 58%
of the All Ordinaries total market capitalisation5. Coincidently, the
S&P/ASX 20 represents a 50/50 split of stocks that were released from
the provisions of the ban on 19 November 2008 (shortable stocks) and
those that remained under the restrictions of the short selling ban
until 22 May 2009 (non-shortable stocks). The period covered is from
19 November 2008 to 22 May 2009; a total of 127 observations.
18 AIMA Journal Q1 2010
has once again shown its commitment to the funds industry in Ireland.
This development also demonstrates the ability of the funds industry
to work with the relevant authorities in Ireland in order to support and
assist the delivery of measures which, it is believed, will be responsive
to the needs of the international funds community.
Brian McDermott is head of the Investment Funds Unit and Nollaig
Greene is professional support lawyer in the Investment Funds Unit,
A&L Goodbody.
Analysis
To test the null hypothesis of a statistically insignificant relationship
between short selling and abnormal stock price movement, a linear
regression model is created with the following specifications:
Model 1: Daily Returnt = α + β (Gross Short Salest) + εt.
Where:
Daily Return6 = Daily stock price return adjusted for dividends (the
dependent variable);
α = Intercept term;
β = Sensitivity of Daily Return to Gross Short Sales;
Gross Short Sales7 = Daily gross short sales as a percentage of shares
on issue (the independent variable);
ε = Error term.
The focus of the modelling is the estimated value for β, the sensitivity
of a stock’s daily return to gross short sales, using a 5% level of
significance.
In order to adjust the stock returns for movements in the overall
market, a second linear regression model was created for each using
the relative daily return of the stocks (relative daily return) as the
dependent variable, calculated as the stock’s daily return (adjusted
for dividends) less the daily return on the All Ordinaries Accumulation
Index. The independent variable remained the same as in Model 1; the
reported gross short sales as a percentage of shares on issue:
1
D’Aloisio, T 08-205 Covered Short Selling not Permitted September 21, 2008.
2
Five additional non-financial securities remained subject to the short selling ban: Calliden
Group Limited, Futuris Corporation Limited, The Rock Building Society Limited, Wesfarmers
Limited and Wide Bay Australia Ltd.
3
ASIC Extends Ban on Covered Short Selling of Financial Securities March 5, 2009. See also
Hamson et. al Has the Short Selling Ban Reduced Liquidity in the Australian Stock Market?
December 22, 2008 for analyses on volatility and the short selling restrictions.
4
See Marsh, W & Neimer, N Impact of Short Sales Restrictions on Share Prices November 30,
2008.
5
Figures obtained from IRESS Market Technology database and Standard and Poor’s.
6
Data sourced from IRESS Market Technology (IRESS)
7
Data sourced from the Daily Gross Short Sales report as published on asx.com.au
8
Data sourced from IRESS
 from our members

Table 1: Model 1 results

Shortable stocks (Model 1)

Stock Company name Industry group Gross short sales coefficient R2

(ASX code) estimate (p-value)

BHP BHP Billiton Limited Materials 11.67 (0.041)** 0.03

BXB Brambles Limited Commercial & Professional -1.15 (0.856) 0.00
Services
CSL CSL Limited Pharmaceuticals -0.74 (0.892) 0.00
FGL Foster’s Group Limited Food, Beverage, Tobacco 8.70 (0.033)** 0.04
NCM Newcrest Mining Limited Materials 8.69 (0.063)* 0.03
ORG Origin Energy Limited Energy 5.41 (0.481) 0.00
RIO Rio Tinto Limited Materials -6.22 (0.095)* 0.02
TLS Telstra Corporation Limited Telecommunications -7.09 (0.045)** 0.03
WOW Woolworths Limited Food & Staples -6.14 (0.165) 0.02
WPL Woodside Petroleum Limited Energy 9.54 (0.188) 0.01

Non-shortable stocks (Model 1)

2
Stock Company name Industry group Gross short sales coefficient R
(ASX code) estimate (p-value)
AMP AMP Limited Insurance 17.33 (0.057) * 0.03
ANZ Australia and New Zealand Banks 4.47 (0.243) 0.01
Banking Group Limited
CBA Commonwealth Bank Banks -0.77 (0.903) 0.00
of Australia
MQG Macquarie Group Limited Diversified Financials 15.39 (0.140) 0.02
NAB National Australia Bank Ltd Banks 4.69 (0.260) 0.01
QBE QBE Insurance Group Limited Insurance 5.81 (0.249) 0.01
SUN Suncorp-Metway Limited Insurance 1.89 (0.620) 0.00
WBC Westpac Banking Corporation Banks 1.18 (0.710) 0.00
WDC Westfield Group Real Estate -6.00 (0.478) 0.00
WES Wesfarmers Limited Food & Staples 4.02 (0.126) 0.02

* statistically significant 1-tailed test result

** statistically significant 2-tailed test result

Model 2: Relative Daily Returnt = α + β (Gross Short Salest) + εt.
Where:
Relative Daily Return8 = Daily stock price return adjusted for
dividends, less the daily return on the All Ordinaries Accumulation
Index (the dependent variable);
α = Intercept term;
β = Sensitivity of Relative Daily Return to Gross Short Sales;
Gross Short Sales = Daily gross short sales as a percentage of shares on
issue (the independent variable);
ε = Error term.
Results
Model 1 produced three statistically significant relationships using a
two-tailed test, namely BHP, FGL and TLS. Two of the three stocks,
BHP and FGL, had positive gross short sales coefficient estimates,
indicating that share prices increased as gross short sales increased.
TLS, however, returned a negative gross short sales coefficient
estimate, indicating that prices decreased with an increase in gross
short sales. Using a one-tailed test, AMP, NCM and RIO produced a
statistically significant relationship. AMP and NCM had positive short
sales coefficient estimates, while RIO returned a negative gross short
sales coefficient estimate.
Model 2 (turn to page 20), using relative share price returns as the
dependent variable, produced statistically significant results using
a two-tailed test for BHP and NAB. These stocks returned positive
gross short sales coefficient estimates, indicating relative share prices
increased as gross short sales increased. In the context of a one-
tailed test, MQG returned a statistically significant result, also with a
positive gross short sales coefficient estimate.
(Continued on page 20)

AIMA Journal Q1 2010 19

 from our members
(Continued from page 19)

Table 2: Model 2 results

Shortable Stocks (Model 2)

Stock Company name Industry group Gross short sales coefficient R2

(ASX code) estimate (p-value)
BHP BHP Billiton Limited Materials 8.98 (0.021)** 0.04
BXB Brambles Limited Commercial & Professional -0.37 (0.950) 0.00
Services
CSL CSL Limited Pharmaceuticals -5.56 (0.314) 0.01
FGL Foster’s Group Limited Food, Beverage, Tobacco 5.71 (0.193) 0.01
NCM Newcrest Mining Limited Materials 7.63 (0.103) 0.02
ORG Origin Energy Limited Energy -3.12 (0.672) 0.00
RIO Rio Tinto Limited Materials -5.26 (0.103) 0.02
TLS Telstra Corporation Limited Telecommunications -6.70 (0.122) 0.02
WOW Woolworths Limited Food & Staples -2.40 (0.603) 0.00
WPL Woodside Petroleum Limited Energy 6.02 (0.255) 0.01

Non- Shortable Stocks (Model 2)

2
Stock Company name Industry group Gross short sales coefficient R
(ASX code) estimate (p-value)
AMP AMP Limited Insurance 10.79 (0.165) 0.02
ANZ Australia and New Zealand Banking Banks 1.88 (0.507) 0.00
Group Limited
CBA Commonwealth Bank of Australia Banks -0.94 (0.841) 0.00
MQG Macquarie Group Limited Diversified Financials 15.92 (0.075)* 0.03
NAB National Australia Bank Limited Banks 6.22 (0.039)** 0.03
QBE QBE Insurance Group Limited Insurance 0.34 (0.938) 0.00
SUN Suncorp-Metway Limited Insurance 2.12 (0.528) 0.00
WBC Westpac Banking Corporation Banks -0.11 (0.961) 0.00
WDC Westfield Group Real Estate -4.05 (0.587) 0.00
WES Wesfarmers Limited Food & Staples 3.24 (0.138) 0.02

* statistically significant 1-tailed test result

** statistically significant 2-tailed test result

In summary, only one out of the 20 stocks analysed returned results
indicating a statistically significant negative relationship between
stock price returns and gross short sales, using a two-tailed test. One
out of the 20 stocks analysed returned similar results using a one-
tailed test. Where the dependent variable was relative stock price
returns, there was no statistically significant negative relationship
using either two or one-tailed tests. In both models there were, in
fact, more instances of statistically significant positive relationships.
This study should encourage further analyses as the results are
inconsistent with the conventional wisdom that declining share prices
are associated with short selling.
ASIC Extends Ban on Covered Short Selling of Financial Securities
www.asic.gov.au, 5 March 2009
D’Aloisio, T. and ASIC
08-205 Covered Short Selling not Permitted
www.asic.gov.au, 21 September 2005
Gardner, P. Hamson, D. Smith, G. and Wanzare, M.
Has the Short Selling Ban Reduced Liquidity in the Australian
Stock Market?
JASSA, The FINSIA Journal of Applied Finance, Issue 4, 2008 pp14-20

The authors are Emily Stewart, Rick Steele, Ashley Young, TechInvest Marsh, W. and Neimer, N.
Pty Limited (www.techinvest.com.au). The Impact of Short Sales Restrictions
17 December 2008
TechInvest is a member firm of AIMA Australia
Standard and Poor’s
Bibliography S&P/ASX All Ordinaries
19 November 2008
Australian Securities and Investment Commission

20 AIMA Journal Q1 2010


COUNTRY PROFILE Cayman hedge fund sector continues to grow
By Paul Govier, Joint Managing Partner and Head of Investment Funds, Maples and Calder, London
F
or over 20 years, the Cayman Islands has been a leading
jurisdiction for the establishment of hedge funds. But in the
wake of the financial crisis, and the subsequent political
backlash and various proposed regulatory reforms for the hedge fund
industry, it has been suggested that this position is being challenged.
This article analyses the recent statistics for fund launches in the
Cayman Islands in order to identify any trend away from Cayman. The
results make for interesting reading.
Statistics
At the end of December 2007, when the full extent of the credit
crunch and political response was yet to be realised, there were
9,413 registered funds in the Cayman Islands. The vast majority of
these were hedge funds. Go forward two years, and substitute a
nascent economic crisis for a nascent economic recovery and many
commentators would have you believe that the landscape has shifted
dramatically. Do the statistics bear them out?
According to the statistics available at the time of writing, there are
9,862 investment funds established in the Cayman Islands. In other
words, the Cayman Islands has increased its total number of funds by
449 (or 4.6%) since the economic crisis began. During this period, the
Cayman Islands has continued to launch in excess of 100 funds per
month, with 1,365 new funds being launched during 2008 and 1,150
new funds being launched in 2009.
Reasons for trend
The Cayman Islands enjoys a position of dominance by virtue of a
combination of good luck and good judgement. Proximity to the USA
certainly helped, but the Cayman Islands are by no means alone in
being in the right place at the right time. Perhaps more importantly,
the Cayman Islands implemented early on a regulatory regime that
struck the right balance between flexibility and prudence and then
applied an approach of, “if it ain’t broke, don’t fix it”.
The Cayman Islands has also remained cost efficient, having increased
its annual fees this year by a small amount; the first increase in
over five years. As a result of years of gaining expertise in this field,
Cayman is now recognised as possessing vast experience in the hedge
fund space which is difficult to replicate elsewhere. The Cayman
hedge fund model, based on tax neutrality and professional efficiency,
has been reviewed extensively by counsel for managers and investors
and is regarded as a tried and tested model; robust enough to
withstand the challenge of the credit crisis.
That is not to say that the inertia in favour of the Cayman Islands
has not been under pressure; but the offshore hedge fund industry
has responded.
Firstly, there has been regulatory pressure. Certain drafts of the now
notorious EU AIFM Directive include provisions designed to favour
the distribution of EU domiciled funds within Europe - although
European investors have lobbied hard to ensure they are not denied
from our members
the opportunity of investing in the best offshore hedge funds and
it looks likely that existing private placement rules will remain to
allow offshore funds to be marketed in the EU. On the other side of
the Atlantic, the Obama Administration has introduced legislation
designed to attack so called “tax havens”; but the proposed US draft
legislation now looks a more proportional response and should not
impact the Cayman model. The G20 and the OECD have committed to
a global approach to the regulation of hedge funds and harmful tax
competition; Cayman has responded by agreeing to tax information
exchange agreements with major G20/EU nations. In addition, Cayman
has received positive reviews from the IMF and the UK Treasury.
Also last year, the Cayman Islands Monetary Authority became a
full member of IOSCO - acknowledgement that it is recognised by a
number of international bodies as meeting international standards.
There has been investor pressure too. Some risk-averse investors
have a preference for conservative strategies better suited to more
regulated products, such as UCITS funds. There are also certain
investors who, for political reasons, require an EU vehicle in which
to invest. But such regulation comes at a cost, restricting investment
strategy and leverage flexibility and hampering performance.
Conversely, sophisticated investors and innovative managers often
prefer the Cayman model which allows for investment strategies
which produce better risk adjusted returns. And Cayman embraces
transparency – it was the first offshore hedge fund jurisdiction, for
example, to introduce know-your-customer and anti-money laundering
rules and collect and publish statistical information on its industry.
There has also been domestic pressure. The Cayman Islands, like many
other nations, incurred a domestic deficit as a result of the global
economic crisis. However, the Cayman Islands acted quickly to address
the deficit, cutting expenditure and raising money through innovative
and incremental measures that will not impact on its vital offshore
industry. It has also implemented initiatives to attract hedge fund
managers and other foreign entrepreneurs to establish offices in the
Cayman Islands to further bolster the economy into the future.
Finally, most of the pressure felt by the Cayman Islands applies equally
to the alternative jurisdictions. All of the offshore jurisdictions,
and several onshore ones, have been subject to global pressure on
tax reform. Many of the regulatory initiatives will impact on them as
well, even the AIFM Directive. And investors have been hurt badly in
supposedly highly-regulated onshore jurisdictions.
Conclusions
The choice of domicile for a new hedge fund is perhaps not as obvious
as it once was. However, the Cayman Islands continues to be the
preferred home for new and existing hedge funds. Investor appetite
for regulated products has fuelled an increase in activity in some
onshore centres, but on the whole for products that complement,
rather than replace, an offshore hedge fund offering. Regulatory
developments, particularly within the EU, may well change the
landscape in the future. But for now, for most hedge fund managers,
the status quo prevails.
AIMA Journal Q1 2010 21
 NEW MEMBERS
New members of AIMA during Q4 2009
Membership of AIMA is corporate, thereby entitling all of your company’s principals to enjoy the many benefits.
For further details, please telephone John Stephens on +44 (0)20 7822 8380. Alternatively, you can email John at
jstephens@aima.org. We look forward to speaking with you.
All information supplied in the following member profiles has been provided by the member company and its accuracy is not
guaranteed by AIMA.
ALTER DOMUS
Country: Hong Kong
Contact: Javed Rahman
Telephone: +852 3579 5858
Email: javed.rahman@alterdomus.com
Business activity: Fund administration,
accounting & custody services
Website: www.alterdomus.com
ARGYLE STREET MANAGEMENT
Country: Hong Kong
Contact: Angel Lo
Telephone: +852 2106 0888
Email: angel.lo@asmhk.com
Business activity: Hedge fund manager/adviser
BATELEUR CAPITAL
Country: South Africa
Contact: Mark Williams
Telephone: +27 21 657 2100
Email: mark@bateleurcapital.com
Business activity: Hedge fund manager/adviser
Website: www.bateleurcapital.com
BLACK CASTLE ASSET
MANAGEMENT
Country: Switzerland
Contact: Serge Aerne
Telephone: +41 71 535 5015
Email: s.aerne@black-castle.ch
Business activity: Hedge fund manager/adviser
Website: www.black-castle.ch
BLACKHEATH FUND MANAGEMENT
Country: Canada
Contact: Jennifer Coghill
Telephone: +1 416 363 2962
Email: jcoghill@blackheathfundmanagement.com
Business activity: Hedge fund manager/adviser
Website: www.blackheathfundmanagement.com
BTIG HONG KONG
Country: Hong Kong
Contact: Christian Kielland
Telephone: +852 3416 5003
22 AIMA Journal Q1 2010
Email: ckielland@btig.com.hk
Business activity: Other service providers
Website: www.btig.com
BUTLER INVESTMENT MANAGERS
Country: UK
Contact: Lorna Nolan
Telephone: +44 (0)20 7319 7700
Email: lnolan@butler-ig.com
Business activity: Hedge fund manager/adviser
CAPITAL FUND MANAGEMENT
Country: France
Contact: Martin Tornqvist
Telephone: +33 1 49 49 59 49
Email: martin.tornqvist@cfm.fr
Business activity: Hedge fund manager/adviser
Website: www.cfm.fr
CAVENAGH CAPITAL
Country: Singapore
Contact: Andrew Gale
Telephone: +65 3125 2200
Email: andrew.gale@cavenaghcapital.com
Business activity: Hedge fund manager/adviser
Website: www.cavenaghcapital.com
CENTAUR FUND SERVICES
Country: Ireland
Contact: Ronan Daly
Telephone: +353 1 899 2400
Email: ronan.daly@centaurfundservices.com
Business activity: Fund administration,
accounting & custody services
Website: www.centaurfundservices.com
CENTURION INVESTMENT
MANAGEMENT
Country: Singapore
Contact: Brian Wong
Telephone: +65 6338 3190
Email: brianwong@centurion.sg
Business activity: Hedge fund manager/adviser
Website: www.centurion-investment.com
CHILTON INVESTMENT COMPANY
Country: USA
Contact: Jennifer Duggins
Telephone: +1 203 352 4000
Email: jduggins@chiltoninc.com
Business activity: Hedge fund manager/adviser
Website: www.chiltonfunds.com
CHINA ASSET MANAGEMENT (HONG
KONG)
Country: Hong Kong
Contact: Iris Chen
Telephone: +852 3406 8688
Email: iris.chen@chinaamc.com
Business activity: Hedge fund manager/adviser
Website: www.chinaamc.com
CMS BUREAU FRANCIS LEFEBVRE
Country: France
Contact: Jérôme Sutour
Telephone: +33 1 47 38 55 00
Email: jerome.sutour@cms-bfl.com
Business activity: Legal services
Website: www.cms-bfl.com
CRYSTALLINE MANAGEMENT
Country: Canada
Contact: Jean-Pierre Langevin
Telephone: +1 514 284 0248
Email: jplangevin@arbitrage-canada.com
Business activity: Hedge fund manager/adviser
Website: www.arbitrage-canada.com
CSAM ASSET MANAGEMENT
Country: Singapore
Contact: Gabor Marosi
Telephone: +65 6823 1531
Email: marosi@csamam.com.sg
Business activity: Hedge fund manager/adviser
DYNAMIC CREDIT PARTNERS
Country: USA
Contact: James Finkel
Telephone: +1 212 319 7027
Email: jfinkel@dynamiccredit.com

Business activity: Hedge fund manager/adviser
Website: www.dynamiccredit.com
ELLIOTT ADVISORS (HK)
Country: Hong Kong
Contact: Verman Wong
Telephone: +852 3558 1000
Email: vwmwong@elliottadvisors.hk
Business activity: Hedge fund manager/adviser
ESEMPLIA EMERGING MARKETS
Country: UK
Contact: Jim Kandunias
Telephone: +44 (0)20 7858 3000
Email: jim@esemplia.com
Business activity: Hedge fund manager/adviser
Website: www.esemplia.com
GALILEO CAPITAL
Country: Switzerland
Contact: Simon Collard
Telephone: +41 22 700 6347
Email: sc@galileo-cap.com
Business activity: Hedge fund manager/adviser
Website: www.galileo-cap.com
GLOBAL TRADING STRATEGIES (UK)
Country: UK
Contact: Amie Chechkin
Telephone: +44 (0)20 7665 6901
Email: Amie.chechkin@gtsinvest.com
Business activity: Other service providers
Website: www.gtsinvest.com
GLOBAL TRADING STRATEGIES
INVESTMENT MANAGEMENT
Country: Australia
Contact: Murray Chatfield
Telephone: +612 9321 8531
Email: murray.chatfield@gtsinvest.com
Business activity: Hedge fund manager/adviser
Website: www.gtsinvest.com
GOODHART PARTNERS
Country: UK
Contact: Peter Taylor
Telephone: +44 (0)20 7016 6080
Email: ptaylor@goodhartpartners.com
Business activity: Allocator manager
Website: www.goodhartpartners.com
HADRON CAPITAL
Country: UK
Contact: Giorgia Pozzoli
Telephone: +44 (0)20 7469 5900
Email: gp@hadroncapital.com
Business activity: Hedge fund manager/adviser
HERSCHEL ASSET MANAGEMENT
Country: Australia
Contact: Mark Burgess
Telephone: +61 3 9631 4855
Email: mark.burgess@herschel.com
Business activity: Hedge fund manager/adviser
Website: www.herschel.com
HILLTOP FUND MANAGEMENT
Country: UK
Contact: Rory Hills
Telephone: +44 (0)20 7788 7799
Email: rory.hills@hilltop.co.uk
Business activity: Hedge fund manager/adviser
Website: www.hilltop.co.uk
INFINITY CAPITAL PARTNERS
Country: USA
Contact: Sarah Wilde
Telephone: +1 678 904 6301
Email: swilde@infinityfunds.com
Business activity: Allocator manager
Website: www.infinityfunds.com
JAMES CAIRD ASSET MANAGEMENT
Country: UK
Contact: Amy Ward
Telephone: +44 (0)20 7073 2100
Email: amy.ward@jcam.com
Business activity: Hedge fund manager/adviser
Website: www.jcam.com
KINGSTON SMITH CONSULTING
Country: UK
Contact: David Morrey
Telephone: +44 (0)20 7566 4000
Email: dmorrey@kscllp.co.uk
Business activity: Consultant (compliance)
Website: www.kscllp.co.uk
KIS CAPITAL PARTNERS
Country: Australia
Contact: Mark McGuire
Telephone: +612 8227 7100
Email: mark.mcguire@kiscapital.com
Business activity: Hedge fund manager/adviser
Website: www.kiscapital.com
LOWENSTEIN SANDLER
Country: USA
Contact: Jordana Silverstein
Telephone: +1 212 262 6700
NEW MEMBERS
Email: jsilverstein@lowenstein.com
Business activity: Legal services
Website: www.lowenstein.com
MACINTYRE HUDSON
Country: UK
Contact: Chris Sutton
Telephone: +44 (0)20 7429 4100
Email: chris.sutton@mhllp.co.uk
Business activity: Accounting, audit, tax &
related services
Website: www.macintyrehudson.co.uk
MACROVALUE INVESTORS
Country: Hong Kong
Contact: Satoko Isobe
Telephone: +852 2523 9577
Email: satoko.isobe@macrovalue.com
Business activity: Hedge fund manager/adviser
Website: www.macrovalue.com
MAMO TCV ADVOCATES
Country: Malta
Contact: Joseph Saliba
Telephone: +356 21 231 345
Email: joseph.saliba@mamotcv.com
Business activity: Legal services
Website: www.mamotcv.com
ML CAPITAL GROUP
Country: Malta
Contact: Ronnie Tanti
Telephone: +356 213 348 01
Email: ronnie@mlcapital.com
Business activity: Consultant (investment)
Website: www.mlcapital.com
MOORE MANAGEMENT
Country: Jersey, Channel Is.
Contact: Patricia Remond
Telephone: +44 (0)1534 822 500
Email: patricia.redmond@mooregroupltd.com
Business activity: Fund administration,
accounting & custody services
Website: www.mooremanagement.com
OPVS GROUP
Country: Singapore
Contact: Nicholas Loh
Telephone: +65 6577 3177
Email: nicholas.loh@opvsgroup.com
Business activity: Hedge fund manager/adviser
Website: www.opvsgroup.com
(Continued on page 24)
AIMA Journal Q1 2010 23
 NEW MEMBERS

(Continued from page 23)

Website: www.quantumglobalfinancial.com THIRD POINT
ORYX INVESTMENT MANAGEMENT Country: USA
Country: South Africa Contact: Marc Zwebner
Contact: John Versfeld RATIONAL ASSET MANAGEMENT Telephone: +1 212 224 7400
Telephone: +27 21 673 5900 Country: USA Email: mzwebner@thirdpoint.com
Email: john@oryxim.co.za Contact: Danilo Santiago Business activity: Hedge fund manager/adviser
Business activity: Hedge fund manager/adviser Telephone: +1 646 652 8707 Website: www.thirdpoint.com
Website: www.oryxim.co.za Email: dsantiago@rationalasset.com
Business activity: Hedge fund manager/adviser
Website: www.rationalasset.com TIMOTHY LOH SOLICITORS
PANDA GLOBAL ADVISORS Country: Hong Kong
Country: USA Contact: Henri Arslanian
Contact: Hans Haywood SAM CAPITAL Telephone: +852 2899 0190
Telephone: +1 212 257 6745 Country: UK Email: harslanian@timothyloh.com
Email: hans.haywood@pandaglobaladvisors.com Contact: Dietmar Schmitt Business activity: Legal services
Business activity: Manager/advisor other Telephone: +44 (0)20 7427 0740 Website: www.timothyloh.com
Website: www.pandaglobaladvisors.com Email: dschmitt@samcapital.com
Business activity: Hedge fund manager/adviser
Website: www.samcapital.com TRIPLE THREE PARTNERS
PAUL, HASTINGS, JANOFSKY & Country: Australia
WALKER (EUROPE) Contact: Simon Ho
Country: UK SKANDINAVISKA ENSKILDA BANKEN Telephone: +61 2 9967 9778
Contact: Christian Parker AB (PUBL) LONDON BRANCH Email: sho@triple3p.com
Telephone: +44 (0)20 3023 5100 Country: UK Business activity: Hedge fund manager/adviser
Email: christianparker@paulhastings.com Contact: Magnus Ward Website: www.triple3p.com
Business activity: Legal services Telephone: +44 (0)20 7246 4285
Website: www.paulhastings.com Email: magnus.ward@seb.co.uk
Business activity: Prime brokerage services TT INTERNATIONAL (HONG KONG)
Website: www.seb.se Country: Hong Kong
PVE CAPITAL Contact: Quentin Burrows
Country: UK Telephone: +852 3476 6000
Contact: Joseph Vittoria STATISTICAL RESEARCH Email: burrowsq@ttint.com
Telephone: +44 (0)20 3206 7374 LABORATORY Business activity: Hedge fund manager/adviser
Email: jv@pvecapital.com Country: UK
Business activity: Hedge fund manager/adviser Contact: Dominic Wells-Cole
Telephone: +44 (0)20 3170 7775 WADHWANI ASSET MANAGEMENT
Email: dominic.wells-cole@srlglobal.com Country: UK
QBASIS FUND MANAGEMENT Business activity: Fund administration, Contact: Pradip Dasani
Country: Cayman Islands accounting & custody services Telephone: +44 (0)20 7663 3400
Contact: Michael Kuehn Website: www.managedaccountplatform.com Email: pradipd@waniasset.com
Telephone: +1 345 926 7265 Business activity: Hedge fund manager/adviser
Email: michael.kuehn@qbasisfund.com
Business activity: Hedge fund manager/adviser TANNENBAUM HELPERN SYRACUSE
& HIRSCHTRITT WITHERS BVI
Country: USA Country: British Virgin Islands
QUANTUM GLOBAL FINANCIAL CORP Contact: Michael Tannenbaum Contact: John Greenwood
Country: Canada Telephone: +1 212 508 6700 Telephone: +1 284 494 4949
Contact: Michele Vincenti Email: tannenbaum@thshlaw.com Email: john.greenwood@withersworldwide.com
Telephone: +1 250 588 6828 Business activity: Legal services Business activity: Legal services
Email: mvincenti@quantumglobalfinancial.com Website: www.thshlaw.com Website: www.withersworldwide.com
Business activity: Hedge fund manager/adviser

Contact
The Alternative Investment Management Association Ltd,
2nd Floor, 167 Fleet Street, London EC4A 2EA
Tel: +44 (0)20 7822 8380 Email: info@aima.org
Registered in England and Wales at the above address. Company No. 4437037 – VAT No. 577 5913 90

24 AIMA Journal Q1 2010