Boards in bear markets

Many horrors were uncovered when the last crash occurred. How much better prepared are fund boards for the next one?

The horrors that were uncovered last time were often in the alternative fund sector. Many of these funds were domiciled in Cayman and consequently that was where a lot of the post-crash fallout happened. But it was by no means only Cayman.
For example, Madoff feeder funds were domiciled in multiple jurisdictions, including in Luxembourg. A large part of the reason for AIFMD’s depositary rules was to prevent another situation arising were no one had a clue where investors’ money, supposedly invested with Madoff, had really ended up. Prior to the crash there were regulated UCITS funds, sold to retail investors, that were Madoff feeders and domiciled in Luxembourg. To read more on this story see the February issue of The NED.