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    Our experienced team of professionals sheds light on relevant industry topics affecting our clients and their shareholders.

    Service provider due diligence and selection best practices 

    The service provider selection and due diligence processes are increasingly scrutinized as critical components of operations for both mutual funds and hedge funds. Due to both liability and risk, investment managers and fund boards are confronted with increased due diligence efforts to understand all aspects of the service provider business and processes in order to justify the use of fund assets to pay these service expenses.

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    Managing inherent risks in mutual fund service conversions 

    The transition of administration, portfolio accounting, transfer agent, custody and distribution services from one mutual fund provider to another fi rm can be the most risky endeavor undertaken by a mutual fund company. The investment manager and fund board are trusting that the successor service provider will both successfully own and manage the entire process, with minimal impact to fund operations and investor servicing. 

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    Best practices for multiple sub-adviser mutual funds 

    The continual evolution of open-end mutual fund manufacturing and distribution compels asset managers to adapt to investor preferences, distribution channels and industry collaboration opportunities. Investment managers with strong relative performance in a given strategy will generally see a demand for their expertise in many forms, including the potential sub-adviser role for an open-end mutual fund, either solely or in a sleeve of an allocation to multiple sub-advisers. 

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    The next generation mutual fund wrap programs 

    The traditional mutual fund wrap program involves the allocation of the sponsor's customer assets across many different third party mutual funds. This traditional wrap structure provides professional management and daily liquidity to both the sponsor and the investor. However, investors are seeking lower product expenses, greater tax efficiency, and better performance. A potential solution to these challenges may be to establish its own wrap sponsor mutual fund family with the wrap sponsor as the investment manager to the mutual funds.

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    How to launch an alternative strategy mutual fund 

    Several capital market trends since 2008 have propelled the convergence of alternative investment strategies with the registered open-end mutual fund industry, creating what many refer to as retail alternatives, liquid alts, or registered alternatives. This whitepaper provides a guideline for some of the critical steps in the process for a hedge fund manager, private equity manager, or fund-of-funds manager to consider in preparing a business plan to launch an alternative investment registered open-end mutual fund.

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    Best practices in Mutual Fund Shared Trusts 

    The long established shared trust structure is experiencing significant growth of mutual funds, assets and investment managers from both startup and existing mutual fund complexes. A shared trust, sometimes referred to as a Multiple Series Trust (“MST”), is an open-end investment management company (mutual fund) that is organized as series trust. The MST structure is typically sponsored by a service provider and is utilized by multiple, unrelated investment management firms to house their mutual fund products.

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    Applying a holistic approach to tax administration 

    As investment companies incorporate more complex vehicles such as commodities, futures, short sales, and master feeders into their portfolio investment strategies, it is crucial that service providers have the infrastructure in place to anticipate any tax, accounting, legal, and compliance risks these securities and complex structures could have to the fund.

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    The big three: procurement, conversions, and relationship management  

    Our economic environment encourages increased regulations, leaner business practices, and more sophisticated technology. This means that now, more than ever before, investment managers must take into account the entirety of their alternative investment administration to either develop an infrastructure that can anticipate and prepare for investor due diligence, or select a third party administrator who can be their servicing partner.

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    Benefits of continuous improvement initiatives 

    Investment management companies are operating in an economic environment that is continually getting leaner, but that does not mean clients’ and shareholders’ needs are diminishing. In fact, higher quality products and services at a reasonable cost are key drivers in today’s marketplace. In order to respond to these changes and challenges, service providers must augment their traditional positions on quality to improve their responsiveness, competencies, and services levels. One way to do this is by embracing the principles of the International Organization for Standardization (ISO).

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    A guide to hedge fund investor due diligence 

    The volatility in the market, combined with recent hedge fund scandals and fraud, has brought investment practices into the limelight and caused increased requirements by the OCC, SEC, FDIC, and FINRA for heightened transparency, risk management, and compliance. With due diligence sharpened around investment processes and services, investors expect managers to rise above market fluctuations, adapt, and evolve their processes to ensure they are adjusting to regulatory changes and challenges.

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    A guide to outsourcing hedge fund administration 

    The trend to outsource is quickly becoming a standard business practice due to increased regulatory demands and investors’ desire for improved transparency, independent oversight, and the segregation of investment management and administration. With due diligence heightened around investment processes and administration services, some institutional investors will not invest unless the administration is performed by an independent third-party.

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