March 2016


March 31, 2016 | Permalink
Lewis Katz was named chief business development officer for liquid alternatives specialist Franklin Square Capital Partners. The Philadelphia-based firm said Katz will seek growth opportunities and diversify distribution into additional sales channels through the expansion of its financial technology, marketing and educational initiatives. He joins Franklin Square from management consulting firm Blackboard Advisors and previously worked at such firms as 1798 Global Partners, Lombard Odier Asset Management, BAM and Dillon Read Capital Management.
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March 29, 2016 | Permalink
The Managed Funds Association (MFA) and the Alternative Investment Management Association (AIMA) submitted a joint comment letter to the SEC on its proposed rule on the use of derivatives by registered investment companies. Although the groups were generally supportive of several components of the proposal, including asset segregation requirements and an activities-based approach to regulation, they also expressed concerns over the adverse effects of the imposition of a notional-based leverage limit on registered funds. The letter also questions the SEC's attempt to redefine and regulate derivatives as "senior securities" under Section 18 of the Investment Company Act of 1940.
Related News:
Hedge funds for retail class face regulatory reckoning - Wall Street Journal
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March 29, 2016 | Permalink
SEC chairwoman Mary Jo White told a legislative hearing that the SEC will be paying additional attention to FINRA as the self-regulatory industry group begins its oversight of about 4,000 brokerages. The SEC previously announced plans to increase its investment adviser examiners ranks by almost 20%. The SEC is accomplishing this through a reallocation of some broker-dealer examiners to the investment adviser exam team, as well as using some of its increased 2016 budget to hire more registered investment adviser examiners. As a result, White said the SEC will enhance its oversight of FINRA's broker examination duties "because we'll be somewhat more dependent on them for broker exams."
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March 24, 2016 | Permalink
Although liquid alternative funds struggled in 2015, each strategy either outperformed or performed similarly to its hedge-fund counterpart amid the overall market volatility, according to Goldman Sachs Asset Management's 2015 Liquid Alternative MAPS report. The report examined 337 hedge fund-like mutual funds, divided into five peer groups, based on strategy. It found a wide dispersion between the performance of liquid alt funds and within each strategy, with some sub-strategies, funds and managers posting profits while others had losses. As a result of this wide dispersion and the difficulty in predicting future performance between strategies, the report recommends portfolio diversification both across and within the overall liquid alt category.
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March 24, 2016 | Permalink
Fund Name: First Trust Strategic Mortgage REIT ETF
Adviser: First Trust Advisors LP
Sub-Adviser(s): None
Fees: 0.85% Management Fee
Open- or Closed-End: Open-End (Exchange traded)
Investor Restrictions: Not specified
Filing Date: March 14, 2016
Effective Date: Pending
   
Fund Name: First Trust Long/Short Currency Strategy ETF
Adviser: First Trust Advisors LP
Sub-Adviser(s): First Trust Global Portfolios Ltd.
Fees: Not specified
Open- or Closed-End: Open-End (Exchange traded)
Investor Restrictions: Not specified
Filing Date: March 14, 2016
Effective Date: Pending
   
Fund Name: First Trust Equity Market Neutral ETF
Adviser: First Trust Advisors LP
Sub-Adviser(s): Perella Weinberg Partners Capital Management LP
Fees: Not specified
Open- or Closed-End: Open-End (Exchange traded)
Investor Restrictions: Not specified
Filing Date: March 14, 2016
Effective Date: Pending
   
Fund Name: First Trust CEF Income Opportunity ETF
Adviser: First Trust Advisors LP
Sub-Adviser(s): None
Fees: Not specified
Open- or Closed-End: Open-End (Exchange traded)
Investor Restrictions: Not specified
Filing Date: March 14, 2016
Effective Date: Pending
   
Fund Name: First Trust Municipal CEF Income Opportunity ETF
Adviser: First Trust Advisors LP
Sub-Adviser(s): None
Fees: Not specified
Open- or Closed-End: Open-End (Exchange traded)
Investor Restrictions: Not specified
Filing Date: March 14, 2016
Effective Date: Pending
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March 22, 2016 | Permalink
Highland Capital Management Fund Advisors, the retail affiliate of Highland Capital Management, added 14 independent broker-dealer sales professionals in the fourth quarter of 2015 and the first quarter of 2016. Highland's IBD sales team represents a broad range of products from Highland Fund Advisors and affiliates NexPoint Advisors, NexPoint Capital and NexPoint Real Estate Advisors, including non-traded BDCs, REITs, mutual funds and ETFs. The firm is also planning to launch a series of interval funds later this year.
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March 21, 2016 | Permalink
BNY Mellon agreed to pay $3 million to resolve a Massachusetts Securities Division investigation into a failure of its accounting system after an upgrade in 2015 led to inaccurate mutual fund pricing. BNY Mellon was unable to calculate the net asset value of approximately 1,200 funds, causing improper pricing that affected 66 institutional clients. BNY Mellon said it's not aware of any investor losses that resulted and that it calculated net asset values using other methods. Massachusetts Secretary of State William Galvin said "It was very sloppy bookkeeping" on BNY Mellon's part, however the Securities Division also stated the company implemented reforms to its internal controls after the problem occurred.
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March 21, 2016 | Permalink
New York City-based iCapital Network, a fintech platform that provides the high-net-worth market with access to alternative investments, acquired the HedgeFocus business from Credit Suisse, which is based in Zurich. The HedgeFocus portfolio contains more than 20 hedge fund access vehicles representing approximately $1.8 billion in assets. With the transfer of assets, iCapital will be responsible for the ongoing administration and servicing of investments for all existing investors as well as marketing, administration and servicing for new investors subscribing through iCapital. The amount of the deal was not disclosed.
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March 21, 2016 | Permalink
The SEC named Keith Cassidy as director of the agency's Office of Legislative and Intergovernmental Affairs, succeeding Tim Henseler, who was named Office Chief in the Division of Corporation Finance's Office of Enforcement Liaison. Cassidy has served as deputy director of the Office of Legislative and Intergovernmental Affairs since 2011, advising on legislative matters, providing technical assistance on securities-related legislation to congressional committees and staff and assisting in preparing SEC testimony for congressional hearings.
Related News:
Anthony Kelly named co-chief of Asset Management Unit - SEC
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March 18, 2016 | Permalink
Liquid alternative funds could provide the answer to the current investor appetite for additional portfolio liquidity and diversification, Forbes contributor Basil Williams argues. Some funds have focused on maintaining liquidity to fit into a UCITS or '40 Act structure at the expense of overall performance, he writes. However, the market volatility of the past six months has shown that well-structured funds can play a valuable role in diversifying risk. Investors require options beyond long equities or long bonds, but Williams states that doing so within a liquid fund requires both a manager with skill in fixed-income relative value investing and a portfolio that is structured in a way that allows it to trade in a manner similar to its corresponding offshore strategy: by "continually seeking out mispriced assets, acquiring them, hedging the resultant macro risks and then selling them when the expected realignment of value is realized."
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March 10, 2016 | Permalink
Fund Name: NexPoint Healthcare Opportunities Fund
Adviser: NexPoint Advisors LP
Sub-Adviser(s): None
Fees: 1.25% Management Fee on gross assets (Class A, C and Z)
Open- or Closed-End: Closed-End (Quarterly repurchase)
Investor Restrictions: $500 minimum initial investment for regular accounts, $50 for retirement accounts, $50 minimum subsequent investment (Class A and C); $100,000 minimum initial investment (Class Z)
Filing Date: March 4, 2016
Effective Date: Pending
   
Fund Name: NexPoint Energy Opportunities Fund
Adviser: NexPoint Advisors LP
Sub-Adviser(s): None
Fees: 1.25% Management Fee on gross assets (Class A, C and Z)
Open- or Closed-End: Closed-End (Quarterly repurchase)
Investor Restrictions: $500 minimum initial investment for regular accounts, $50 for retirement accounts, $50 minimum subsequent investment (Class A and C); $100,000 minimum initial investment (Class Z)
Filing Date: March 3, 2016
Effective Date: Pending
   
Fund Name: NexPoint Discount Yield Fund
Adviser: NexPoint Advisors LP
Sub-Adviser(s): None
Fees: 1.25% Management Fee on gross assets (Class A, C and Z)
Open- or Closed-End: Closed-End (Quarterly repurchase)
Investor Restrictions: $500 minimum initial investment for regular accounts, $50 for retirement accounts, $50 minimum subsequent investment (Class A and C); $100,000 minimum initial investment (Class Z)
Filing Date: March 3, 2016
Effective Date: Pending
   
Fund Name: FEG Directional Access TEI Fund
Adviser: FEG Investors LLC
Sub-Adviser(s): InterOcean Capital LLC
Fees: 0.85% Management Fee
Open- or Closed-End: Closed-End (Twice-annual repurchase; Feeder fund)
Investor Restrictions: Accredited investors; $50,000 minimum initial investment; $25,000 minimum subsequent investment
Filing Date: Feb. 24, 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
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March 8, 2016 | Permalink
The SEC announced the creation of the Office of Risk and Strategy, led by Peter Driscoll, that will enhance the regulator's oversight of financial advisers. The Washington D.C.-based team will examine investment advisers and mutual funds through the development and use of "new tools and techniques" to strengthen the activities of the SEC's Office of Compliance Inspections and Examinations. Driscoll has been OCIE's Managing Executive since 2013 after joining the SEC in 2001 as a staff attorney with the Division of Enforcement in Chicago. Robert Fisher was subsequently appointed as Driscoll's replacement as Managing Executive of OCIE.
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March 2, 2016 | Permalink
The Credit Suisse Liquid Alternative Beta Index increased 0.13% in February, the first positive result posted in three months after it lost 1.42% in January, 1.47% in December and 0.63% in November. The Managed Futures strategy showed the strongest returns for February, gaining 3.03% on the index, which aims to measure the performance of the overall hedge fund industry using liquid securities. The Long/Short Liquid Index was the lone negative performer of the five strategies, down 0.77% in February and 3.12% so far in 2016.
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