the last session before lunch….
Various members of the Bahamas financial services industry gave us an insight into running an asset management industry. In a post-Madoff world, the quality of internal controls within funds has had to improve strongly. They need to detail & document their proceedures, and that staff take ownership of these proceedures. Its a mental shift away from the fund manager thinking he is running a fund, towards more of a focus on running a business. Similar to how Templeton ran his business when he moved to the Bahamas in the 1960´s, firms need to diversify their service providers and their back office.
As as asset allocator, and we had the head of SocGen´s priviate bank lead us though this, its a challenging market. fixed income is dangerous, inflation fears looming large in the background, and thanks to the various stimulous plans, returns on cash are close to zero.
From the international perpective there is the risk of hyper regulation, how is that going to play out? Are we going to be able to invest in hedge funds that are based in cayman? Are we going to pay taxes on all cross-border investments. Europeans are playing a dangerous game, if you over regulate, people will leave and money will leave…