Hedge Fund Awards 2015

Hedge Fund Awards 2015 www.acquisition-intl.com 6 The changing regulatory environment in the global banking system offers both opportunity and risk to generate absolute return for hedge funds, Shin says. “Upcoming Basel III, Dodd Frank and so on new regulatory regimes have affected global banks to reduce or even shut down their proprietary fixed income trading desk/prop-book in Asia, which has been one of the key reasons for declining liquidity, especial- ly in fixed income market. Declining liquidity can be both opportunity and risk. Hedge fund who has good network can engage in providing liquidity with stable profits that global banks used to enjoy. “However, if fixed income funds who do not have good network and have to un- wind large position in the short period of time, it may negatively affect the performance on the flip side. “Korean, Japanese and so on regulations on off-shore USD/EUR/JPY/ and so on currency bond issuance have also provided opportunity to generate alpha for off-shore hedge funds, such as Gen2 Partners, to generate stable returns”. “On the other hand, strengthening regulatory has negatively affected capital raising efforts. In order to solicit new investors, there is mount- ing regulatory requirement which practically close the door for smaller hedge funds to raise the assets in such countries. We attribute this as one of reason for big hedge funds getting bigger, while small hedge funds are getting smaller.” Gen2 offers a high degree of transparency, says Shin. “We can provide transparency through independent risk monitoring firms at reasonable fees to the clients. It can be monthly or even daily risk report provided directly to the investor in customized formats. Clients may even have their own ID/PW to access their daily/weekly/monthly risk information from our independent risk monitoring company’s website. “Our Fund Administrator can also provide ITR (Investor Transparency Report) directly to the investor, which is not common in Asian hedge fund industry. We are trying to provide as much comfort as possible to the investors, while not affecting the Funds and/or other investors’ rights.” Working in Asia presents both challenges and opportunities, Shin says. “In terms of opportunities, regulatory arbitrage may not widely be available outside of certain countries in Asia. And in terms of challeng- Best Multi-Strategy Fund - Asia (KS Asia Absolute Return Fund IC) “ Wecanprovide transparency through independent riskmonitoringfirmsat reasonable fees to theclients. It canbe monthlyorevendailyriskreport pro- videddirectly to the investor incustom- izedformats.Clientsmayevenhave theirownID/PWtoaccess theirdaily/ weekly/monthlyriskinformation fromour independent riskmonitoring company’swebsite.OurFundAdmin- istratorcanalsoprovide ITR(Investor TransparencyReport) directly to the investor,whichisnot commoninAsian hedge fund industry.Weare trying to provideasmuchcomfort aspossible to the investors,whilenot affecting the Fundsand/orother investors’ rights. ”