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When I was growing up substance tended to have other connotations to what it has become today in Financial Matters.

It was more related to illegal drugs rather than Sound Practices. However in the last month my in box has received new reviews of best practice from Jersey, Guernsey, the Isle of Man and Mauritius. But do they go far enough or how may a Board enhance its oversight in the Fund sector.

I waded through a 214 page Board report last week and still came out of it thinking there were still ways to enhance the Board pack. In so doing what could we as the Board could do to enhance the offering to potential investors and were we doing enough to protect existing investors. What was missing from this and other recent meetings which would allow me to do my job better and enhance the substance for the portfolio manager of the meeting rather than just lip service to the past and future regulatory induced changes.

All require the Investment Manager and Advisor with the Board to work independently to get the most out of a meeting.All involved looking at the level of transparency and how this may improve the level of Corporate Governance.

Independent reviews remain an imperative. You may receive a detailed one from the Administrator but how detailed is the one you get from the Custodian. How often does it send up any sort of red flag event that has happened between the Administrator and the Manager. They do happen and more often than you think.

Independent Risk Review of what the Portfolio Manager is doing. How much have they deviated from the prospectus? Are they using their limits to the maximum or are they not fully expressing themselves in the portfolio?

Fund performance review which should not only include against its benchmark but also against its peer group. This not only means portfolio performance but also changes in the size of assets in the fund and once a year a review of the TER of all portfolio’s. It should also measure UCIT’s against non UCIT’s and the influence of a client base.

Marketing Review of the Fund should not only include a recap of recent visits and client visits to the portfolio managers office but also planned trips. This will allow the Board to potentially open doors to a new market and introduce investors, gatekeepers and local practices together with government related bodies.

Corporate events which should not only include changes in personnel but also what is happening in other funds that the portfolio manager manages. It should also look briefly at product development and what it may mean for resources in the future.

All will give much greater substance and enable the Director to answer questions with confidence to the same level of detail to any existing or future investors due diligence team.

Tags:   Business   Systems


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