SEC Charges Gatekeepers of Two Mutual Fund Trusts for Inaccurate Disclosures About Decisions On Behalf of Shareholders (SEC)
The Securities and Exchange Commission today charged the gatekeepers of a pair of mutual fund trusts with causing untrue or misleading disclosures about the factors they considered when approving or renewing investment advisory contracts on behalf of shareholders. Some trusts are created as turnkey mutual fund operations that launch numerous funds to be managed by different unaffiliated advisers and overseen by a single board of trustees. The federal securities laws require all mutual fund directors to evaluate and approve a fund’s contract with its investment adviser, and the funds must report back to shareholders about the material factors considered by the directors in making these decisions. The SEC Enforcement Division’s Asset Management Unit has been taking a widespread look into the investment advisory contract renewal process and fee arrangements in the fund industry.
Event-Driven Hedge Fund Centaurus To Return External Capital (Finalternatives)
Battling redemptions and investors unhappy with its strategy, Centaurus Capital will return outside money. The London-based hedge fund will move forward exclusively with internal capital—and without its Hong Kong office, which is also to be jettisoned, Reuters reports. Centaurus reportedly elected to forego client capital due to disagreements with investors about the best investment opportunities, and expects to return all investor cash within a few weeks. “We have taken the decision to return investors’ funds and go private,” Randel Freeman, Centaurus’ chief investment officer, said. “We are extremely grateful for the support of our investors over many years; however, we are keen for the investment flexibility that running our own money will deliver.”
Five Questions: K2’s David Saunders Weighs Changes in Fund-of-Funds Industry (InstitutionalInvestor)
The hedge fund industry has changed dramatically since David Saunders and his business partners founded K2 Advisors, the $9.4 billion Stanford, Connecticut-based fund-of-hedge-funds firm, in 1994. Hedge fund assets have exploded from $167 billion in 1994 to over $2.37 trillion today; the investor base has become increasingly institutional; and the variety and number of hedge funds has increased. Outsize returns have become harder to come by, while manager transparency and the understanding of what creates non-market-driven performance, or so-called alpha, has increased. Meanwhile, the fund-of-hedge-funds space has become increasingly competitive as these managers vie to prove they can add value for clients who otherwise might choose to invest directly in one or more hedge funds…
Transocean Refuses Icahn’s Statements; Urges To Support Its Board Nominees (RTTNews)
Refuting Carl Icahn‘s statements, Transocean LTD (NYSE:RIG) said it believes Icahn’s proposals are misguided and highlight his poor understanding of the cyclical and capital-intensive nature of the offshore drilling industry. In its presentation to its shareholders, Transocean LTD (NYSE:RIG) urged them to support for the company’s five Director nominees and reiterated that the Board’s proposed $2.24 per share dividend will maximize value creation for its shareholders. The company also urged its shareholders to vote FOR the Board’s proposal that its authority to issue shares out of the company’s authorized share capital be renewed for an additional two-year period.
