February 2016


February 26, 2016 | Permalink
Liquid alternative investment firm Collins Capital closed down the Collins Alternative Solutions Fund, a mutual fund of hedge funds, after it suffered significant losses in 2015 that continued into 2016. Collins launched the fund in 2012 and, despite a boom of popularity in the liquid alternative funds space, it only attracted $175 million of investments. The fund closed on Feb. 19 and will be liquidated, according to a regulatory filing.
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February 25, 2016 | Permalink
Fund Name: FS Global Credit Opportunities Fund - ADV
Adviser: FS Global Advisor LLC
Sub-Adviser(s): GSO Capital Partners LP
Fees: 2% management fee on gross assets (at the Master Fund level); 20% of pre-incentive fee net investment income that exceeds 11.25% per year measured quarterly, once return on adjusted capital exceeds 9% per year, with a catch-up provision (at the Master Fund level)
Open- or Closed-End: Closed-End (Quarterly repurchase; Feeder fund)
Investor Restrictions: $5,000 minimum initial investment; $500 minimum subsequent investment
Filing Date: Feb. 22, 2016
Effective Date: Pending
   
Fund Name: FS Global Credit Opportunities Fund - T
Adviser: FS Global Advisor LLC
Sub-Adviser(s): GSO Capital Partners LP
Fees: 2% management fee on gross assets (at the Master Fund level); 20% of pre-incentive fee net investment income that exceeds 11.25% per year measured quarterly, once return on adjusted capital exceeds 9% per year, with a catch-up provision (at the Master Fund level)
Open- or Closed-End: Closed-End (Quarterly repurchase; Feeder fund)
Investor Restrictions: $5,000 minimum initial investment; $500 minimum subsequent investment
Filing Date: Feb. 22, 2016
Effective Date: Pending
   
Fund Name: Sierra Total Return Fund
Adviser: Sierra Total Return Fund Advisors LLC
Sub-Adviser(s): None
Fees: Not specified
Open- or Closed-End: Closed-End (Quarterly repurchase)
Investor Restrictions: $2,500 minimum initial investment for regular accounts, $1,000 for retirement accounts (Class A); $2,500 minimum initial investment for regular and retirement accounts (Class T); and $2 million minimum initial investment (Class I)
Filing Date: Feb. 12, 2016
Effective Date: Pending
   
Fund Name: NorthStar Real Estate Capital Income Master Fund
Adviser: NSAM B-RECF Ltd.
Sub-Adviser(s): NSAM US-RECF LLC
Fees: 2% management fee on gross assets; 20% of pre-incentive fee net investment income that exceeds 8.75% per year measured quarterly, once return on adjusted capital exceeds 7% per year, with a catch-up provision
Open- or Closed-End: Closed-End (Quarterly repurchase; Master fund)
Investor Restrictions: Accredited investors
Filing Date: Feb. 4, 2016
Effective Date: Pending
   
Fund Name: NorthStar Real Estate Capital Income Fund-T
Adviser: NSAM B-RECF Ltd.
Sub-Adviser(s): NSAM US-RECF LLC
Fees: 2% management fee on gross assets (at the Master Fund level); 20% of pre-incentive fee net investment income that exceeds 8.75% per year measured quarterly, once return on adjusted capital exceeds 7% per year, with a catch-up provision (at the Master Fund level)
Open- or Closed-End: Closed-End (Quarterly repurchase; Feeder fund)
Investor Restrictions: $4,000 minimum initial investment; $500 minimum subsequent investment
Filing Date: Feb. 4, 2016
Effective Date: Pending
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February 19, 2016 | Permalink
A senior SEC enforcement official said companies withholding information about data breaches could face civil and criminal enforcement actions. The SEC is looking to crack down on companies that don't disclose a breach when they become aware it has occurred. Speaking as part of a Practicing Law Institute panel, Stephanie Avakian, deputy director for the SEC's enforcement division, said that while the agency would weigh the challenges created by the variety of variables associated with a data breach, the enforcement division will take action where it judges companies violated their duties.
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February 18, 2016 | Permalink
Asset manager Franklin Templeton hired former UBS O'Connor executive Tim Everett, who has joined alternatives unit K2 Advisors. Based in Stamford, Conn., Everett will report to K2 co-founder and CEO David Saunders and will be responsible for communicating investment strategy and philosophy to existing and prospective clients. He was previously a portfolio manager for UBS O'Connor and was also employed at Adam's Hill Partners, Hunter Global and White Eagle Partners. Meanwhile, the Templeton global equity group also added Andy Burkly, a former Oppenheimer head of institutional portfolio strategy.
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February 17, 2016 | Permalink
The SEC announced that Daniel S. Kahl was named chief counsel of its Office of Compliance Inspections and Examinations, where he will oversee a staff of 15 lawyers and advise OCIE's leadership on legal, technical and policy matters regarding the agency's National Exam Program. Kahl joined the SEC's Division of Investment Management in 2001 as a counsel and was later promoted to branch chief. He has since served as assistant director of the division's Investment Adviser Regulation Office. Before joining the SEC, he was an attorney at the Investment Adviser Association, FINRA and the North American Securities Administrators Association.
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February 11, 2016 | Permalink
Fund Name: NorthStar Real Estate Capital Income Master Fund
Adviser: NSAM B-RECF Ltd.
Sub-Adviser(s): NSAM US-RECF LLC
Fees: 2% management fee on gross assets; 20% of pre-incentive fee net investment income that exceeds 8.75% per year measured quarterly, once return on adjusted capital exceeds 7% per year, with a catch-up provision
Open- or Closed-End: Closed-End (Quarterly repurchase; Master fund)
Investor Restrictions: Accredited investors
Filing Date: Feb. 4, 2016
Effective Date: Pending
   
Fund Name: NorthStar Real Estate Capital Income Fund-T
Adviser: NSAM B-RECF Ltd.
Sub-Adviser(s): NSAM US-RECF LLC
Fees: 2% management fee on gross assets (at the Master Fund level); 20% of pre-incentive fee net investment income that exceeds 8.75% per year measured quarterly, once return on adjusted capital exceeds 7% per year, with a catch-up provision (at the Master Fund level)
Open- or Closed-End: Closed-End (Quarterly repurchase; Feeder fund)
Investor Restrictions: $4,000 minimum initial investment; $500 minimum subsequent investment
Filing Date: Feb. 4, 2016
Effective Date: Pending
   
Fund Name: NexPoint Real Estate Strategies Fund
Adviser: NexPoint Advisors LP
Sub-Adviser(s): None
Fees: 1.25% Management Fee
Open- or Closed-End: Closed-End (Quarterly repurchase)
Investor Restrictions: $2,500 minimum initial investment (Class A and C); $100,000 minimum initial investment (Class Z); $50 minimum initial investment (retirement accounts); $50 minimum subsequent investments
Filing Date: Jan. 19, 2016
Effective Date: Pending
   
Fund Name: Direct Lending Income Fund
Adviser: Direct Lending Income Fund Advisors LLC
Sub-Adviser(s): None
Fees: 1% Management Fee
Open- or Closed-End: Closed-End (Quarterly repurchase)
Investor Restrictions: $25,000 minimum initial investment; $5,000 minimum subsequent investment
Filing Date: Dec. 31, 2015
Effective Date: Pending
   
Fund Name: Stone Ridge Trust V
Adviser: Stone Ridge Asset Management LLC
Sub-Adviser(s): None
Fees: Not specified
Open- or Closed-End: Closed-End (Quarterly repurchase)
Investor Restrictions: $15 million minimum initial investment for institutional investors and their clients; No minimum for other client groups
Filing Date: Dec. 11, 2015
Effective Date: Pending
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February 9, 2016 | Permalink
President Barack Obama's fiscal 2017 budget proposal includes a goal of doubling the SEC's funding over the next five years with the objective of protecting investors through the stronger regulation of investment advisers. The proposal earmarks an 11% increase to the SEC's budget, which would reach $1.8 billion. The SEC is looking to increase its scrutiny of the approximately 11,500 registered investment advisers and this budget increase would allow it to add 100 employees to its adviser-exam staff. The president's final budget proposal also includes a 32% increase to the CFTC's budget, which would rise to $330 million.
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February 8, 2016 | Permalink
Experts say proposed SEC regulations that would require mutual funds to have a minimum cash cushion and liquidity risk management programs in place could have a broad impact on retirement plans. A reduction in mutual funds' illiquid holdings stemming from the proposed rule could lead to lower overall returns for those funds, which could lead some DC plans to drop mutual funds as investment options and replace them with separate accounts or commingled funds. The proposal could also lead to a drop in the overall value of illiquid securities, affecting DB plan investments. The SEC proposal would require mutual funds to be allowed to charge fees to investors who pull their money on days of elevated withdrawals, set up a portfolio-tailored liquidity risk management program for open-end funds and permit funds in some instances to use "swing pricing," among others. The SEC also proposed to strengthen and clarify an existing guideline that no more than 15% of a fund's assets should be held in securities that would take more than seven days to convert to cash. The comment period for the proposed rule ended in January, but no date has been set for a final approval.
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February 5, 2016 | Permalink
Alternative mutual funds' popularity with investors increased from 2007 to 2014 and attracted $124 billion in new investments during that period, according to an industry report by PwC. The products had total assets of $334 billion invested in 569 funds by the end of that period, the report found. In the year ahead, PwC expects alternative mutual funds will continue to gain acceptance and investment inflows as the integration between alternative and traditional asset management continues, while increased access to traditional capital sources for product innovation and greater opportunities for defined contribution plans to invest in alternative strategies will also benefit the industry.
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February 3, 2016 | Permalink
The SEC named Jane Jarcho as the deputy director of the Office of Compliance Inspections and Examinations (OCIE). Jarcho was the national director of OCIE's investment adviser/investment company examination program since 2013 and will continue in that role, responsible for inspections of U.S. registered investment advisers and investment companies. Under her leadership, investment adviser/investment company examinations increased more than 27% and targeted areas such as cybersecurity, never before examined investment advisers and investment companies, alternative mutual funds, fixed income funds and retirement accounts.
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February 3, 2016 | Permalink
FINRA identified cybersecurity as a technology management issue under the priority area of supervision, risk management and controls. The SEC also listed cybersecurity as a top priority in its Examination Priorities for 2016 notice, because at least 74% of advisers have been a target of a cyber-attack, it says. A current issue related to cybersecurity in the financial advising industry is wire fraud, said Michael Kitces, a certified financial planner and director of financial planning for Pinnacle Advisory Group. Cyber-thieves are contacting advisers, pretending to be clients on vacation, claiming they've been robbed, and requesting a wire transfer immediately, he said. Fraudsters are hacking into clients' personal emails and looking through their "sent" files to gain financial information, and contacting the advisers with phony requests.
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