The consultant decided to maintain a neutral stance on Australian equities, hold an overweight to income securities and maintain listed property allocations at zero across all of Implemented Portfolios’ individually managed accounts. Raising money from US institutional investors will get tougher under the Dodd-Frank Act. A briefing note from funds management consultant SEI last month said that for many years, non-US asset managers had been able to claim an exemption from registration with the Securities Exchange Commission, which applied to advisers with fewer than 15 clients in the preceding 12 months who did not publicly hold themselves out in the US as an investment adviser. However, Dodd-Frank will see that exemption apply only to ‘foreign private advisers’ whose 15-or-fewer US clients speak for less than US$25 million, or ‘private fund advisers’ of solely private funds totalling not more than US$150 million.
SEI warned that registration with the SEC was “not just an exercise in completing paperwork”, with the compulsory appointment of a chief compliance officer one of many requirements. On the upside, SEI said managers with SEC registration tended to be more appealing to institutional investors, with many of them screening for it. The new global CEO of BNP Paribas Securities Services, Patrick Colle, said the Australian business would have a sub-custody offering for foreign investors here available by the end of the year. Private equity managers tend to ask existing investors for a ‘re-up’ when their previous fund is about four years into its seven-to-10 year lifecycle. Managers will often downplay the importance of their previous fund’s performance to that point, but research from UK consultant Preqin has found it to be an excellent predictor for future relative performance.
