Most Read Contributor in British Virgin Islands, January 2017
When our global funds partners decided to meet in the
Entertainment Capital of the World, there was a great deal of
scepticism from the rest of the firm as to how constructive our
collective output from the meetings might be.
One of our kindly litigation partners even had the temerity to
question whether given the performance of the hedge funds sector in
2016 so far, we would be better suited meeting at a Holiday Inn in
Blackpool (for those not familiar with this UK city, try and keep
it that way).
However, we then explained hand on heart that we were actually
there to also attend a variety of events being hosted around the Skybridge
Alternatives (SALT) Conference, it made a little more sense.
SALT is one of the largest conferences in the US focusing on the
alternatives market and brings along some fantastic speakers
ranging from Michael Bloomberg and Mark Cuban through to Kobe
Bryant and Will Smith. Eclectic to say the least. I should at this
point make it very clear that we did not attend SALT, but rather
the unofficial gathering of service providers that has grown year
on year and now commands a pretty impressive standing of its own
right. Think New York Mets as compared to the New York Yankees.
But our colleagues did have a fair point; you have some rather
big hitters in the industry right now spreading some rather gloomy
At the annual Berkshire Hathaway shareholder meeting on April
30, Warren Buffett criticized the high fees at many hedge funds and
the high pay given to managers for subpar performance. Dan Loeb of
Third Point struck a similar chord in his first quarter commentary,
writing that this is one of the most catastrophic periods of hedge
fund performance since his fund's inception. Sadly, these
messages were continued at SALT.
Hedge fund manager J. Kyle Bass, the founder of Hayman Capital
Management, made an ominous observation about the markets when he
said: "If I was to draw an analogy to where we are today,
comparatively speaking, to where we've been in the past, I
think we're in March or April 2007 in the context of the credit
and equity markets."
Given the period of financial crisis that followed-on from that
time, these words were received heavily indeed.
So, with all of this going on, you'd have expected a very
sombre mood indeed around the poolside cabanas. But actually, when
we co-hosted over 400 invitees on the Wednesday, the atmosphere was
pretty positive. Clearly, the sunshine and free alcohol were
catalysts towards this, but we did all bump into a number of
managers who were very successfully navigating the markets and
service providers who were far busier than they had ever been
Now, to some degree, this came as no surprise when speaking to
the regulatory experts who have seen the interest in their
offerings rapidly increase over the last few years, especially
those that have carved out a niche in cyber-security as well.
Indeed, at SALT they invited Admiral James Stavridis to speak on
this very topic.
But there were also plenty of managers who had been running
successful domestic funds for a few years and are now looking to
launch offshore vehicles to complement their onshore offering,
although clearly in this current climate, they are all looking for
the most cost-effective and efficient way to do it given the huge
costs involved now with moving from being an emerging manager to
attracting institutional money.
The Harneys offering in both the BVI and Cayman meets
those demands and our offshore blog cards were more in demand than
So a huge thank you to everyone we met for taking the time to
talk to us and very much looking forward to seeing you next year
already. If a kindly person out there could also take it upon
themselves to prevent the Harneys group from hitting an off-strip
karaoke bar at 3am one evening (with clients in tow of course),
2017 might be an even bigger success....
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