The Fund Society

?? The S.S. Private Wealth returns to Private Asset Island… is the real private asset treasure really still buried? It's no secret that the optimal structure for many private asset investments is closed-ended. The 10+ year lockups and minimum size requirements have kept the private wealth sector away. But change is coming – and it’s wielding tokenised crowbars, discount-hunting maps, and Guernsey’s PCC master keys to pry treasure chests open! This week it's time to look at the closed-end opportunities and explore how private wealth can get involved. Including how: ?? Tokenisation could slice LP interests into fractional, tradable bites (Bain sees a $400bn opportunity here) ?? London-listed alts – trading at “Black Friday” discounts – could there be a reboot for listed private equity and alternative funds? ??? Guernsey’s PCCs are turning co-investments into plug-and-play cells for family offices and other investors. Enjoy! If you want to read last week's article in this series focused on private wealth and private assets, focused on the new open-end semi-liquid structures, the link is in the coments. #privateassets #privatewealth #privateequity #venturecapital #privatecredit #realassets #listedprivateequity #investmenttrusts #investmentcompanies #tokenisation

?? Ahoy there! The S.S. Private Wealth is charting a course to Private Assets Island – but beware, the voyage isn’t all smooth sailing. Between choppy illiquidity waves, regulatory icebergs, and the ever-looming challenges of cost management, even the savviest of captains (read: fund managers) need help navigating these waters. In this, the first of two articles on private asset investment and private wealth, I look at open-ended semi-liquid fund solutions. The key challenge is to ensure the structures are fit for purpose and controls are suitable for wealth managers, private banks, defined contribution pension advisers and ultimately the underlying investors. ?? #privateassets #privatewealth #privateequity #venturecapital #LTAF #ELTIF

Embracing Chile’s essence - green bonds, copper and lithium, avocados and flamingos. ???????? Yesterday EPIC Investment Partners’ fixed income team published a short note on Chile, its 2050 green bond and mining - I’m married to a Chilean, sit on the board of EPIC’s Next Generation Bond Fund and am always interested in green finance as well as the resources we need for the future and where they come from, so this was bound to be of interest! At the forefront of Chile’s economic resilience is its mining industry which accounts for 58% of exports. Codelco, the state-owned copper colossus, represents 28% of Chile’s vast copper production and it’s moving into lithium - essential for EV and battery technology. State owned companies are not the most straightforward and Codelco’s journey is no different - debt is expected to reach USD30bn by the end of the decade, but if Chile and Codelco can pull off the right balance of public/private partnerships, encouraging greater investment in the country, in sustainable mining, in cutting-edge technologies and develop strategic alliances that enhance both efficiency and green credentials, then considering the value of Chile’s copper and lithium resources and the global demand, this is a country and a state-owned enterprise worth watching. The Chilean government’s 2050 green bond is a compelling investment for a sustainable future. Though not as cheap as Codelco’s bonds, which trade at a 70bps wider spread according to EPIC, the green bond’s still very competitive 7.6% yield offers an attractive and promising avenue for eco-conscious investment with government backing and it supports sustainability initiatives. So why the (AI created) image for this post? Well in the EPIC team’s quirky note, they write about Chile’s lush avocados and elegant flamingos as metaphors for Chile’s natural heritage and industrial and economic resilience. They also commented that as a nod to Chile’s potential, our local pubs could be renamed from the likes of “The Dog and Duck” in honour of a Chilean blend of tradition and innovation, or where the beauty of nature coexists with the might of industry…! Perhaps that’s a metaphor too far! Sorry EPIC, but I’m not sure my next pisco sour will be at “The Avocado & Flamingo”! But anyway, let’s toast to the resilience and adaptability that my wife’s homeland exemplifies, qualities that I’m pleased to see the EPIC Investment Partners team clearly admires. If you’re interested in EPIC’s investment funds including Next Generation Bond Fund check out their website here: https://lnkd.in/g3mge7hq. Or if you’re interested in structuring green bonds or green funds (Guernsey has its sustainable finance regime ready) drop me a line. #chile #greenbonds #sustainablefinance #sustainablemining #energytransition #fixedincome #greenfunds Parita Ghalay, FREDERICK COLDHAM, Joe Hurley, Maria Jose Freeman (Fernandez), Stephanie Glover, Guernsey Finance

Are we on the cusp of true permanent / perpetual private capital vehicles? Private equity continuation vehicles have been front and centre of discussions for me with partners for some time but this week in London (hence the image), it’s been a key talking point… PE already takes a longer term approach to public markets and putting the pieces of the jigsaw together (hence the other image!) I can see continuation vehicles giving the option for GPs and investors to take holding periods for choice assets into perpetuity. This isn’t such a new concept - so many families have held their companies for decades and more, delivering and creating multi generational returns which can be ploughed into new investment and backing the next wave of entrepreneurs. Incorporate some sort of tokenised units for investors/LPs for efficient potential liquidity should they need, such as those which the Guernsey Financial Services Commission (GFSC) published a policy statement on earlier in the week, and we find ourselves with a truly compelling vehicle that potentially aligns GPs, LPs and importantly the underlying companies for long term and continuous investment and returns. So where have these continuation discussions been held - a great Real Deals panel yesterday morning (with Hani El Khoury of Coller Capital, Michal Lange of Astorg, Simon Greenway, CFA of Pantheon and Stefano Manna of Investec and moderated by Greg Gille). That followed on from a dinner I compered with key international PE lawyers and advisers for Guernsey Finance on Tuesday at 12 Hay Hill, Mayfair and of course the buzzing and incredibly well attended Funds Forum event on Wednesday. One of the other consistent messages this week was that Luxembourg continues to be a “difficult and expensive place” to do business in, while Guernsey remains favoured for PE, VC and private assets due to the experience and expertise, pragmatic regulatory approach, accessiblity for global investors, and time and cost efficiency in bringing funds and vehicles to market. As ever I’m happy to discuss with GPs, LPs and advisers on innovative solutions, strategy and structuring for continuation vehicles as well as PE/VC funds and tokenisation. I can also make the relevant introductions to service providers, expert lawyers and adminsitrators to deliver and manage these solutions. Thanks to all who have made this week in London such a great week for me. So good to catch up with great business friends and make new ones. Great weekends all. I’m looking forward to a wonderful family wedding! #privateequity, #continuationfunds, #tokenisation. Guernsey Investment & Funds Association, Rupert Pleasant, Barnaby Molloy, Kate Storey , Matthew Brehaut , Chris Hutley-Hurst , Kobus Cronje, James Tracey, Joe Briggs, Rhys Owen, Victoria Younghusband, Gabriel Boghossian, Jo Kitcat, James Crawford, Annette Alexander, Alana Colley, Valentina Elner-Kupcha, Mark Wakem, Lee Hiu Yau, Robin Bowie, Jay Goss, Pavandeep Wakem, Mark James

Coinciding with today’s Funds Forum in London was a policy announcement on #tokenisation from Guernsey’s regulator, the Guernsey Financial Services Commission (GFSC) - Guernsey is definitely open to this very exciting technology which has the potential to create huge efficiencies and reduce costs for investors in secondary fund transactions. The regulator is approachable to discuss. Tokenisation was one of the subjects we discussed last night at a round table dinner with leading international private equity lawyers and advisers. Matt Ong of Ctrl Alt speaking on this topic on panel 2 of Guernsey Funds Forum - in the process of launching their first tokenised fund, attracted to Guernsey because of company law, expertise and creative approach to challenges for an emerging technology… and nice people to work with! Earlier at #GFF and the first panel of the day (pictured) … capital raising in today’s environment… moderated by a wonderfully animated Nicholas Watt (political editor of Newsnight). Great to hear some positivity on fundraising for managers. While markets are challenging and there is uncertainty politically all over the world with 64 general elections globally, there are successes for fund managers - most importantly the strategy need to be relevant. Interesting also to hear from Eve Ellis of Ropes & Gray LLP that increasingly managers are considering other jurisdictions such as Guernsey, over Luxembourg and they don’t necessarily need to be in the EU as they can use private placement regimes to rifle shot specific EU countries in addition to being more attractive to global investors. Second panel… the future of funds… what’s trending? Lavanya Raghavan of White & Case LLP, opens with comments on Continuation Funds for private equity and private asset funds - lots going on in this space as investors look for liquidity, managers don’t want to sell assets at inoppoutune times to realise full value and continuation vehicles solve these issues. Again, this was a key conversation point at last night’s dinner. Guernsey well placed to host these vehicles due to lower costs and more efficient and quicker time to market than other jurisdictions. Great to be in London again for Guernsey Funds Forum 2024 - nice opening address Rupert Pleasant! Its absolutely packed here and buzzing! Guernsey Finance #investmentfunds #privateequity #venturecapital

Great talk from Nigel Toon, AI expert, author, government adviser and CEO of Graphcore. Nigel started by telling us it’s expected about 150 million smart learning machines will be delivered this year - within our own lifetimes those machines will take over our companies and governments, perform surgery and look after our health and ultimately care for us in our old age. They’ll then bury us. They will always be learning so we’ve got to be careful how we programme them, just as we must be careful about how we programme anything. They are not things - they are of course babies. Nigel’s point was that we are always “programming” the next generations and we can’t live in fear of AI and the revolution it will bring and that we are ultimately in control of the parameters we set. Truly fascinating to hear directly from a true leader in the space. I am always blown away by the calibre of visitors we have to this small island. Nigel was speaking as part of the Guernsey Literary Festival and there was a good interview following the talk, led by the very knowledgable Patrick Cunningham. Thank you also to The NED Forum and sponsors Investec Bank Channel Islands and Aspida Group.

Investing ?? and investigative journalism ?? - the ticker tape tightrope! Recently launched hedge fund, Hunterbrook, is also an investigative news publisher. It's an interesting model whereby profits from the hedge fund power the cost of the journalism. However the hedge fund can trade on content produced before it is published. That naturally brings all sorts of legal, ethical and moral questions. Hunterbrook launched at the start of April and before publishing its first investigation into alleged malpractices at a major US mortgage lender, Hunterbrook's trading arm took short positions on the target company and long positions on its competitor. With its "activist journalism" model they must be careful of the balance between genuine reporting and market manipulation. While not explicitly illegal, Hunterbrook claims its journalists won't provide insider information to the trading arm, relying only on open-source intelligence and public records. The startup hedge fund has secured ￡100 million in funding and boasts heavyweight journalists, aiming to target underreported issues like environmental destruction and human rights abuses. It is, perhaps, not completely dissimilar to the model of activist managers such as Hindenberg or Muddy Waters, whose analysts publish their notes on companies the funds have already shorted or taken stakes in. Regulatory scrutiny looms, with the SEC investigating potential coordination between short sellers and market manipulation. The legality of such a model in the UK remains ambiguous, and cautionary tales from the past highlight the risks of blurring the lines between journalism and financial gain. In 2005 two Daily Mirror journalists were convicted of buying shares ahead of tipping companies in their "City Slickers" column. The then editor, Piers Morgan, was cleared of buying shares in a company the pair tipped the day before publication. Hunterbrook is marketing its model as a saviour to investigative journalism. Its success will depend on its ability to maintain transparency and accuracy while generating returns for investors, truly a challenging tightrope to walk. We watch with interest how the regulators view this convergence. Will investment funds truly become the rescuer of investigative journalism, which has seen continued budget cuts from media houses over the last 25 years resulting in ever more populist and political reporting campaigns. Follow, like and share The Fund Society #hedgefunds #investment #journalism #ethics #thoughtnuggets