Cerberus and the U.S. Auto Industry

2017 ◽  
pp. 1-16
Author(s):  
David P. Stowell ◽  
Jeremy Hartman
Keyword(s):  
Significant Role ◽  
Hedge Funds ◽  
Private Equity ◽  
Conflicts Of Interest ◽  
Low Cost ◽  
Hedge Fund ◽  
Auto Industry ◽  
The U.S

This case explores how and why GM became a major user of private equity and hedge fund capital, as well as the risks and rewards of these new relationships. The Cerberus transaction, audacious in both its size and complexity, is explored in detail. What were the alternatives for GM, and what risks and opportunities lay ahead for both parties? This case investigates the benefits, disadvantages, and potential conflicts of interest that evolved as GM's many suppliers increasingly embraced low-cost, nontraditional financing from hedge funds.To analyze the significant role that private equity and hedge funds play in providing capital to corporations, especially those in distressed industries.

8 Investor Protection Concerns in Private Investment Funds

2018 ◽  
Author(s):  
Spangler Timothy
Keyword(s):  
Hedge Funds ◽  
Private Equity ◽  
Business Models ◽  
Conflicts Of Interest ◽  
Investor Protection ◽  
Hedge Fund ◽  
Private Investment ◽  
Investment Funds ◽  
Equity Funds ◽  
Private Equity Funds

This chapter examines the governance challenge in private investment funds arising from investor protection failures. It begins with a discussion of the Madoff affair, which brought to the fore alleged failures in reporting, oversight and governance mechanisms regarding private investment funds, whether hedge funds, private equity funds, real estate opportunities funds or other more esoteric investment pools. It then considers some issues which the Madoff debacle drew attention to, including the presence of multiple fund vehicles in the same structure or in interconnected structures such as parallel funds, master-feeder, and fund of funds. It also analyses the Financial Conduct Authority’s (FCA) concerns about hedge fund fraud and conflicts of interest that may arise in the business models of any of the participants in the private equity market. Finally, it describes ongoing diligence and oversight regarding private investment funds and the Securities and Exchange Commission’s (SEC) concerns over due diligence involving private funds.

Current Hedge Fund Debates and Controversies

2017 ◽  
Author(s):  
Dianna C. Preece
Keyword(s):  
Insider Trading ◽  
Hedge Funds ◽  
Conflicts Of Interest ◽  
Hedge Fund ◽  
Securities And Exchange Commission ◽  
Active Management ◽  
Wall Street ◽  
Net Worth ◽  
Market Participants ◽  
Alternative Beta

The hedge fund industry has grown to nearly $3 trillion over the last 20 years. High-net-worth individuals and institutional investors expect high returns and low correlation with traditional asset classes in exchange for the fees paid. The standard fee structure is “2 and 20,” 2 percent of assets under management and 20 percent of profits, representing high fees for active management. Hedge funds are largely unregulated and somewhat mysterious. As a result, they are the subject of debates and controversies among market participants and policymakers alike. Debates focus on fee structures, alpha versus alternative beta, weakening returns, activist investors, and leverage. The Securities and Exchange Commission has targeted hedge fund misconduct and malfeasance, pursuing perpetrators of fraud, insider trading, and conflicts of interest in the industry. Several high-ranking Wall Street hedge fund executives have been charged with, and in some cases convicted of, breaking securities laws.

Narrowing the Gap

2017 ◽  
Author(s):  
Graeme Guthrie
Keyword(s):  
Boards Of Directors ◽  
Private Equity ◽  
Conflicts Of Interest ◽  
Low Cost ◽  
Best Interests ◽  
Managerial Ownership ◽  
Leveraged Buyout ◽  
For Profit ◽  
Low Levels ◽  
And Control

Manager-shareholder conflict arises due to low levels of managerial ownership and the resulting wide separation of ownership and control. However, strong boards of directors can make even small ownership stakes more effective at motivating executives to work in shareholders’ best interests by granting stock options, repurchasing shares, and issuing debt. Ultimately they can approve a leveraged buyout, although a strong board is needed to overcome the conflicts of interest involved in management-led buyouts. This chapter uses events at HCA, the for-profit hospital chain that undertook the world’s largest leveraged buyout followed a few years later by the largest private equity IPO, to explain how boards can narrow the gap between ownership and control. It uses a novel representation of a firm’s capital structure to analyze the techniques for boosting ownership-generated incentives at relatively low cost to shareholders.

SEC asset management unit’s enforcement priorities for 2015 – conflicts of interest

2015 ◽  
Vol 16 (2) ◽  
pp. 22-25
Author(s):  
Perrie Michael Weiner ◽  
Patrick Hunnius ◽  
Sean R. Crain
Keyword(s):  
Asset Management ◽  
Hedge Funds ◽  
Financial Services ◽  
Private Equity ◽  
Conflicts Of Interest ◽  
Content Type ◽  
Enforcement Action ◽  
Investment Companies ◽  
Equity Funds ◽  
Private Equity Funds

Purpose – To address “Conflicts, Conflicts Everywhere,” a speech at the recent IA Watch 17th Annual Compliance Conference by Julie M. Riewe, co-chief of the Securities and Exchange Commission’s Enforcement Division’s Asset Management Unit (AMU). Design/methodology/approach – Provide information on the AMU’s creation, the AMU’s 2015 priorities for each of the primary investment vehicles it polices –registered investment companies; private funds (both hedge funds and private equity funds); and other client accounts, such as separately managed accounts/retail accounts – and the AMU’s central concern across all of the investment vehicles it polices: conflicts of interest. Findings – Conflicts of interest will be receiving much attention from the Commission in the coming months. In order to help avoid an SEC inquiry or, worse yet, an enforcement action, corporations and individuals should seek counsel. Originality/value – Practical explanation and guidance from experienced securities and financial services lawyers.

Introducing Hedge Funds

2021 ◽  
pp. xviii-32
Author(s):  
Douglas Cumming ◽  
Sofia Johan ◽  
Geoffrey Wood
Keyword(s):  
Mutual Funds ◽  
Hedge Funds ◽  
Private Equity ◽  
Financial Regulation ◽  
Hedge Fund ◽  
Limited Partnership ◽  
Equity Funds ◽  
Private Equity Funds ◽  
Performance Activism

This introduction reviews recent research on hedge funds. The Handbook of Hedge Funds comprises 21 chapters from authors around the world. The chapters describe hedge fund industry governance, flows, limited partnership contracts, compensation, fund strategies, performance, activism, effects on investee firms, misconduct, misreporting, fraud, and financial regulation. Further, the chapters highlight differences with other types of intermediaries, such as private equity funds and mutual funds. The chapters feature both US and international analyses. This introductory chapter summarizes papers that appear in the handbook, provide a theoretical framework for research on hedge funds, and highlight research trends on topic.

The Oxford Handbook of Hedge Funds

2021 ◽  
Keyword(s):  
Hedge Funds ◽  
Optimal Taxation ◽  
Private Equity ◽  
Hedge Fund ◽  
Global Perspective ◽  
Fund Flows ◽  
Theoretical Approaches ◽  
The Us ◽  
Hedge Fund Activism ◽  
The Impact

The Oxford Handbook of Hedge Funds provides a comprehensive look at the hedge fund industry from a global perspective. The chapters are organized into five main parts. After the introductory chapter in Part I, Part II begins in Chapter 2 with an analysis of the main factors that have affected the operation of hedge funds. Chapter 3 explains the concept of hedge fund flows. Chapter 4 examines hedge fund manager fees and contracts. Part III focuses on different types of hedge fund strategies. The broad array of strategies are summarized in Chapter 5. Chapter 6 empirically examines the performance of hedge fund strategies. Chapter 7 compares the strategies of hedge funds to private equity funds. Chapter 8 examines hedge fund herding. Chapter 9 examines hedge fund commodity trading advisors and leverage. Chapter 10 examines financial technology in hedge fund strategies. In Part IV, hedge fund activism in the US is examined in Chapter 11. The US and international literature on hedge fund activism is reviewed in different perspectives in Chapters 12 and 13. Case studies are provided in Chapter 14. The impact of activism on large company innovation is discussed in Chapter 15. In Part V, Chapter 16 examines whether hedge funds may engage in misreporting and fraud. Chapter 17 reviews work on hedge fund misconduct and detection. Chapter 18 discusses compliance among hedge funds. Chapter 19 examines theoretical approaches to hedge fund regulation. Chapter 20 examines optimal taxation. Chapter 21 examines hedge funds from a political economy context.

The SEC’s Evolving Scrutiny of Private Equity Firms: KKR Hit with an Unprecedented Enforcement Action for Broken Deal Expense Misallocation

2015 ◽  
Vol 16 (4) ◽  
pp. 39-42
Author(s):  
Veronica Rendon Callahan ◽  
Ellen Kaye Fleishhacker ◽  
Robert Holton ◽  
Steven A. Kaplan ◽  
Kevin Lavin ◽  
...  
Keyword(s):  
Hedge Funds ◽  
Design Methodology ◽  
Private Equity ◽  
Hedge Fund ◽  
Private Investment ◽  
Investment Funds ◽  
Content Type ◽  
Enforcement Action ◽  
Policies And Procedures ◽  
Practical Implications

Purpose – To explain and analyze SEC charges and settlement with Kohlberg Kravis Roberts & Co. (“KKR”) related to misallocation of broken deal expenses. Design/methodology/approach – Provides background, including other similar SEC enforcement actions in relation to private equity and hedge funds; explains the regulatory violations in KKR’s broken deal allocation methodology and related disclosure; draws lessons and makes recommendations for private equity firms concerning the need for compliance and disclosure reviews and the benefits of remediation and cooperation. Findings – This enforcement action and other similar ones represents a continuing SEC focus on fee and expense misallocation. It is also relevant to advisers to real estate and hedge fund complexes that face similar allocation issues. Practical implications – Private equity firms and other advisers to private investment funds should re-evaluate their fee and expense allocation policies and procedures to be sure that they adhere to current regulatory and investor expectations. Originality/value – Practical guidance from experienced securities enforcement and litigation and investment management lawyers.

scholarly journals An international comparative study of the influence of investment funds on enterprise management

Impact ◽  
2021 ◽  
Vol 2021 (3) ◽  
pp. 41-43
Author(s):  
Yumiko Miwa
Keyword(s):  
Comparative Study ◽  
Hedge Funds ◽  
Conflicts Of Interest ◽  
Hedge Fund ◽  
Enterprise Management ◽  
Investment Funds ◽  
International Comparative Study ◽  
Socially Disadvantaged ◽  
International Comparative

In the world of business nowadays there is a focus on shareholders, and a lack of separation between ownership and management. Innovations in investment technology have led to a growth in the assets of institutional investors and an increased influence of investors. Indeed, many investors have assumed the role of 'speaking shareholder' for the companies in question. This is referred to as hedge fund activism, with once silent investors becoming shareholders and, as a result, individuals and hedge funds are able to dominate the activities of companies. From the late 1990s to the early 2000s this situation was centred around pension funds but now revolves around hedge funds. Professor Yumiko Miwa, Graduate School of Commerce, Meiji University, Japan, is conducting an international comparative study of the influence of investment funds on enterprise management. This research investigates anti-takeover measures, preferential treatments and addresses potential conflicts of interest. In other research, Miwa is working to address the stance taken by some companies that women are socially disadvantaged. The topic of this research is Women Working in the Capital Markets.

Reassessing Relationships between Communication Forms and Political Knowledge in Political Campaigns from a Geospatial Perspective: The Case of Local TV News

2019 ◽  
Author(s):  
Yung-I Liu
Keyword(s):  
Survey Data ◽  
Significant Role ◽  
Presidential Elections ◽  
Television News ◽  
Political Knowledge ◽  
Political Campaigns ◽  
Political Discussion ◽  
Tv News ◽  
Cable Television News ◽  
The U.S

<p><a>This study investigates the informing effects of communication in political campaigns from a geospatial perspective. The results from analyzing survey data collected during the 2000 and 2004 presidential elections in the U.S. generally suggest that the main forms of traditional </a>communication, i.e., print newspapers and network and cable television news—but with the exception of local TV news—play a significant role in informing citizens about political campaigns. Political discussion also plays a role in this regard. The implications of the respective roles of a number of news forms in a democracy are discussed.</p>

Retrospective on the 1970’s “Low Cost Shore Protection” program

Shore & Beach ◽  
2019 ◽  
pp. 3-12
Author(s):  
Joan Pope
Keyword(s):  
Coastal Erosion ◽  
Low Cost ◽  
Management Strategies ◽  
Public Information ◽  
Coastal Engineering ◽  
Shoreline Erosion ◽  
Shore Protection ◽  
Demonstration Program ◽  
Alternative Approaches ◽  
The U.S

In the 1970s, the U.S. Congress authorized and funded a five-year demonstration program on low-cost methods for shore protection called the “U.S. Army Engineers Shoreline Erosion Control Demonstration (Section 54) Program.” The Section 54 also known as the “Low-Cost Shore Protection” demonstration program is revisited. Demonstration and monitoring sites including the materials, devices, vegetative plantings, approaches tested, and program findings are discussed. Simply put, a major finding of the Section 54 program was that the concept of “low-cost shore protection” was a bit naïve. However, the program did lead to a wealth of public information documents and practical coastal engineering lessons that are still resonating as home owners, communities, and engineers consider alternative approaches for managing coastal erosion. The program structure and findings are applicable 40 years later as consideration is given toward the use of Natural and Nature-based Features (NNBF) for addressing coastal erosion. Evolution in thought relative to coastal erosion and shoreline enhancement activities since the 1970s has built upon many of the lessons and concepts of the Section 54 program and other real-world coastal erosion management success-failure experiences. This growth has led to a modern appreciation that those features that emulate NNBF are promising and responsible alternative coastal erosion management strategies if proper engineering standard elements of design are included in the project.

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