Phil Griffiths of JP Fund Administration (Cayman) explains the
considerations to keep in mind when establishing a fund in the
Latam region.
In the alternative investment community, much of the regulatory
and investor focus is now on the use of independent service
providers: directors, banks, brokers, auditors and administrators.
This focus is hardly surprising given recent scandals.
Although Madoff and other fraudsters were not running hedge
funds or other alternative investment structures (Luxembourg Ucits
were used), the practice of receiving investor funds into company
accounts, executing trades through a proprietary brokerage,
reporting all activities and client holding values internally and
using a 'friendly' auditor to sign off enabled the
perpetration of massive fraud; all industry participants are
understandably cautious. The days of the investment manager faxing
the NAV to the administrator at the end of the month are long
over.
