AIMA Updates Offshore Hedge Fund Guide

by Phillip Morton, Investors Offshore.com

21 January 2008

The Alternative Investment Management Association (AIMA) has launched its new Offshore Alternative Fund Directors’ Guide.

The updated Guide – originally published in June 2005 - is the latest addition to AIMA’s work in the arena of sound practices and corporate governance. The Guide further demonstrates the association’s ongoing efforts in setting global hedge fund industry standards.

AIMA’s compendium of work now includes key initiatives in the areas of governance, hedge fund management, valuation, fund administration and business continuity. The Guide is appearing at a time when there is increased scrutiny and debate surrounding the role of directors of offshore funds, particularly hedge funds. It aims to provide advice on the selection and formal appointment of directors of offshore funds for both fund managers, and individuals considering serving as directors themselves.

The revised Guide includes recommendations on key areas, including the independence of non-executive directors and conflicts of interest, as well as auditors’ communications and representations to the board.

The Guide sets out the fundamental legal and tax implications that should be taken into consideration when directors to a fund are appointed. Also covered are the basic tasks that fund directors should carry out, as well as guidelines on such important issues as liability insurance and taxation.

Andrew Baker, Deputy Chief Executive Officer at AIMA, commented:

“This is a vital initiative for an evolving global industry. Hedge fund corporate governance is very much under the spotlight so this Guide is a timely addition to the toolkit and shows how AIMA continues to lead the way for practitioners."

"Our aim is to provide as much clarity as possible in an ever more complex and demanding area so that the industry can improve the knowledge of people performing this most important of roles. It is essential that we continue to acknowledge the desire of policymakers, regulators and investors to focus on the improvement of practices within the hedge fund industry.”

Baker concluded:

“As more emphasis is placed on who is actually sitting on the Boards of Funds and how they perform their duties, it is important that both managers and Directors keep up to date with the current standards of practice expected by both regulators and hedge fund investors.”

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