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AIMA To Publish Hedge Fund Guide For Investors

by Phillip Morton, Investors Offshore.com

04 February 2008

The Alternative Investment Management Association (AIMA) has announced that its Investor Steering Committee (ISC) is to publish the world’s first collaborative educational guide for hedge fund investors.

The guide, which is being developed in association with the Chartered Alternative Investment Analyst Association (CAIAA), will be authored by UBS’s Alexander Ineichen, supported by Kurt Silberstein of the California Public Employees’ Retirement Systems (CalPERS).

According to AIMA, a global hedge fund association with 1,280 corporate members worldwide, it is the first global effort between investors and the hedge fund industry, and will provide access to meaningful and practical information on the nature and activities of the hedge fund industry – including information on hedge fund strategies, performance data, investment processes, and industry and business dynamics.

The AIMA ISC’s initiative will focus on intermediate level investors such as Fiduciaries, Investment Consultants and Trustees, and has been designed to complement the US President’s Working Group (PWG) Investor Committee’s series of best practices for basic level investors, which is due to be published in February 2008.

Alexander Ineichen, Senior Investment Officer at UBS Asset Management stated that: “The transformation of the asset management industry from a focus on relative returns towards the absolute return investment philosophy embraced by hedge funds is arguably a big deal. Despite the institutionalization of the hedge fund industry being in full swing for many years, there is still misconception and myth among some institutional investors and their boards, trustees and consultants. This report will be designed to clarify what hedge funds really are and, more importantly, are not."

Emma Mugridge, Director of AIMA commented that: “We have long acknowledged that investors are a vital part of the hedge fund industry. This is the first time that they have had such a meaningful educational role to play and, importantly, the initiative also meets the Financial Stability Forum’s Highly-Leveraged Report (2007) recommendation that industry and investors work more closely to develop positive initiatives."

“It is also significant that a number of the world’s leading investors will be involved in developing this guide. The ISC has moved at an emphatic speed since it was created in July and the initiative clearly demonstrates that AIMA and the investor community are working closely in tandem."

Russell Read of the US President’s Working Group welcomed the AIMA ISC initiative, observing that: “This initiative from AIMA’s Investor Steering Committee complements the work we are undertaking on behalf of investors and fiduciaries in the US. Nonetheless, it is clear that both initiatives will only be truly worthwhile if they are accepted by, and in turn become commonplace within, the investor community at-large.”

AIMA’s ISC project will complement AIMA’s Sound Practices for the Global Hedge Fund Industry – a substantial body of work developed by AIMA over the last 10 years and including guidelines on: Managers; Valuation; Administration; Governance; Business Continuity; Due Diligence for Managers, Prime Brokers and Administrators; Anti-Money Laundering; and Industry Certification (in conjunction with the Chartered Alternative Investment Analyst (CAIA) Association).

The Guide is expected to be published in the second quarter of 2008.

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