June 2009: The Federal Reserve Transparency Act would require the first audit ever of the Federal Reserve. The bill has 234 sponsors, a comfortable majority of the members of the House, and is gaining momentum. The Obama administration should be delighted, given its commitment to transparency in government.
Global Investment Crisis
Portfolio Value Reductions
Highly unpredictable investment returns
Rampant fear changes investor priorities
Elevated Market Pressures
Financial Institutions Face Uncertainty
Liquidity issues for certain investments
Plight of traditional asset classes
Current situation (2)
Increased Portfolio Volatility & RiskExposure
Rogue Hedge Funds
Black box funds
Little (if any) transparency
Have rigorous standardized processes been established for:
Risk Management Position Entry & Exit Methods InvestorFundsSegregation
Do they have a 3rd party fundadmininistrator?
Is the fund transparent?
Key Money Management Considerations
Level of Liquidity
How fast can I get out of the fund?
How high is the volatility?
How much potential risk exposure is there?
T I P Transparency, Instant Liquidity and Principal Protection
Investment structure designed to provide 100% principal protection.
Full capital preservation for today’s volatile markets
Risk-Free investment funds with higher than average ROI
A Truly Bullet Proof Investment
Principal Protection: Example Policy: 80 - 90% of a fund’s investment capital and profits are allocated to purchase AAA rated Government Treasury Bonds. Investors Eprinciple guaranteed Fund AAA Bank Notes SP500 futures trading 10% 85-90% G7 Government Bonds
A fund guarantee is only as strong as its guarantor.
Instant Liquidity (con.) The Next Generation Fund Standard
Each investor's capital is treated as a separate lot allowing for:
The underlyingmarket positions to besoldintohighlyliquidmarkets (in real time);
Funds to beavailable the next clearing dayready for transfer.
In order to establish investor trust, Hedge Funds should provide:
Complete transparency of all key internal & external factors
Ability for the investor to check all transactions / internal processes
First rate auditing and control oversight
Transparency: a solution
NextGenerationHedgeFundsshouldinclude the following:
Complete due diligence documentation (DDQ) includingManagement Team
All VerifiedAncillaryentities (i.e. Custodial, Accounting, Legal, etc.)
Third Party Administrators
ONLINE transparency& Accountability New technologies
A new online solution
Thanks to new technologies, we can envision a new kind of Financial world based on trust, liquidity and capital protection.
New breakthrough technologies combined with the essential requirement for full accountability, creates a new standard in the financial world... a standard which is anchored with full trust, liquidity and capital protection.
Through the interconnection of all these critical factors in the Hedge Fund chain, new benefits can be obtained.
Problems The bigpicture Solutions
With new standardizationand technologies, the HedgeFundindustrywill enter a new phase!
It is time to takeourindustryinto a new direction.