Education

Benefits of Custody Examination vs. Financial Statement Audit

Registered investment advisers (RIAs) that maintain custody of customer assets, and who are registered with the Securities and Exchange Commission (SEC), are subject to various regulations intended to protect their clients. One such rule under the Investment Advisers Act of 1940 – the “custody rule” (i.e., SEC Rule 206(4)) – requires RIAs to obtain external…

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Accounting for Equity Interests Other Than the Consolidation Model

Fund managers are typically responsible for the preparation of financial statements of their underlying investment, in accordance with Accounting Standards Codification (ASC) 946 – Financial Services – Investment Companies, which requires the valuation of investments under ASC 820 – Fair Value Measurements. Please note that this topic excludes interests that are required to be consolidated…

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AICPA Revenue Recognition Working Group Releases Compliance Concerns for Fund Managers

The American Institute of Certified Public Accountants’ (AICPA) Revenue Recognition Task Forces have been issuing industry specific guidance related to Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers. Several of these issues relate specifically to fund managers and should be considered when implementing the new revenue recognition standard. Identification…

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The Challege of Liquidation Basis of Accounting

A liquidation may present several obstacles to be navigated by the organization, one such obstacle being the accounting. The proper application of Liquidation Basis of Accounting (LBOA) within financial statements can be quite challenging. The goal behind LBOA is to report the amount that an investor may expect to receive after the completion of the…

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An Evolving Hedge Fund Industry Looks for New Investors in a Changing Landscape

Changing investor demographics, pressure to boost investment results while also cutting fees, increased competition and the ramifications of potential tax reform will drive significant changes in the hedge fund industry over the next few years. Following are overviews of several key trends that will present new opportunities and new challenges. Success for any hedge fund…

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Your Guide to the Many Flavors of Quant

Quantitative finance has become a buzzword of modern finance, though it’s been around for decades. Thanks in no small part to the success and allure of firms like Renaissance Technologies LLC, quant hedge funds ended 2016 at an all-time high of $500 billion under management, according to estimates from Barclays Plc. Quant strategies all use…

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The Promise & Perils of Machine Learning in the Enterprise

Several years ago, I lived along the coast and had this fantastic deck. It had this crazy breeze that always seemed to be blowing across it. I loved that deck, except for one thing. It could get very cold. So, I decided that I needed a space heater to complete my vision of deck-bliss. But…

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Hedge Fund Allocations Get Rethought

Institutional investors are beginning to view hedge funds in a new light, according to allocation consultancies. More and more investors are moving away from keeping their hedge funds investments segregated in alternative investment portfolios to are grouping them with the rest of their investments by risk-return drivers. To learn more about this topic click here. 

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Commodity Sentiment

Commodity Sentiment systematically quantifies the impact of real-time news on investors’ confidence in the commodity price outlook. In this note, we examine three types of commodities are currently supported: gold, crude oil, and natural gas. To learn more about this topic click here.  

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Making Sense of Blockchain Opportunities

A blockchain taxonomy for investors. Blockchain technology is being used in a growing diversity of applications, offering a complex array of investment opportunities. While the technology is so new that any investment in it is speculative, patterns of use are emerging. In this report, we propose a taxonomy to enable investors to more quickly and…

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