Comment and Analysis: Why cybersecurity suddenly matters

May 2014

Following the recent high-profile security breaches, including direct attacks by vendors on large retailers and the Heartbleed incident, cybersecurity has suddenly become a hot topic. Where previously the focus on maintaining the confidential nature of fund data was on keeping it protected from competing forces, the dialogue has now broadened to providing assurances that equipment and data are kept safe from all eventualities; and given the multi-client nature of our business, it is critical for service providers to demonstrate complete integrity in this area.

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Spotlight turns to regulatory issues as capital flows in

February 2014

Welcome to the spring edition of Citco’s Industry Spotlight. In this issue, we bring you our perspective on the ever-evolving regulatory landscape, and, given our role as an asset service provider, we focus on meeting operational challenges as they relate to new products and regions and asset classes, such as private equity and real estate.

Based on what we saw in 2013, the alternative sector appears for the most part to be in rude health. Returns didn’t soar to stock market levels but they weren’t expected to: for Citco-administered funds, average returns of 12% across all strategies marks 2013 as a good year.

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Blueprint for a 40 Act fund

February 2014

For a manager launching a US registered alternative mutual fund, structure is key. Opting for an open-end or closed-end fund and deciding on the trust for the fund have major implications for how it can invest, who can invest in it and how it fits with the manager’s other offerings.

The choice of open-end or closed-end is most important. Both fund types are registered with the US Securities and Exchange Commission (SEC) and subject to regulatory oversight, but only open-end funds are available to the general public. Investors in closed-end funds are required to meet the SEC’s definition of an accredited investor. This distinction will have an obvious impact on the distribution channels the manager pursues and on its marketing strategies.

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Making the case for improved efficiency

February 2014

Over the past several years, Hedge Funds have been taking time to re-examine their business models with the goal of reducing their cost structures. Business process re-engineering can be an effective technique to achieve this.

The “science” of business process re-engineering was born from manufacturing industry, where tight margins made getting the manufacturing process right a necessity. In the mid-1990s, the same techniques were applied to business process cycles to gain efficiencies and effectiveness. Today, these concepts are starting to be applied in the hedge fund world with great success.

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