Solomon Harris hosted its inaugural Webinar on the highly topical subject of Managing Distressed Cayman Funds and lessons learned for new funds, on 21 April.
‘Hosting this webinar fits in perfectly with our firm’s progressive approach to business and our focus on keeping our clients up-to-date and informed. This is particularly so as our firm tends to work directly with investment managers and the more informed our clients are, the better for us as their legal advisers,’ said Sophia Harris, the firm’s Managing Partner.
Partner, Paul Scrivener, head of the investment funds group, was equally enthusiastic.
‘The recent significant stresses placed upon hedge funds, particularly in Q4 of 2008, have given our investment funds group invaluable insight into the issues facing managers with liquidity problems and the legal and practical tools available to them,’ he said.
‘We were keen to share our experiences in a practical way with those involved in the industry and we felt the medium of the webinar was the ideal way to reach the widest possible audience.’
The firm join with KPMG in the presentation. Whilst KPMG locally are probably better known for the provision of US tax services to Cayman funds, Paul Hotchkiss of KPMG covered recent tax changes in the UK and the possible impact on Cayman Islands investment funds.
“I visited Cayman recently to undertake a series of seminars on these and similar topics and I am delighted to be asked by Solomon Harris to participate,’ said Mr. Hotchkiss.
‘UK taxation of offshore funds is undergoing significant change and also there has been an increased interest from HM Revenue and Customs in the structuring of such funds. As Cayman has been historically, and is still, widely used as jurisdiction of choice to establish funds with a UK focus, I hope my comments will be relevant to the participants who are involved with funds with a UK focus.”
The first part of the webinar covered reasons for liquidity issues, withholding redemption payments, in-kind payments, redemption gates and side pockets.
The second part covered voluntary winding up as an option for distressed funds, and its effects, notice of Winding up, declaration of solvency, court-supervised liquidation and conduct of voluntary liquidation.
Finally, the third part covered the new UK fund regime, EUSD in relation to funds and transfer pricing, offer documents, corporate residence and tax investigations.
‘The response to the webinar was overwhelming, confirming how topical it is,’ said Laura Hatfield, partner and head of the firm’s dispute resolution and corporate recovery group.
‘We are looking forward to hosting a webinar annually but will do so more frequently if necessary where we feel the need to address other pressing topics affecting the Cayman hedge fund industry.’
As investment funds are such a major part of the firm’s practice, the firm also launched its fund-specific website, CaymanHedgeFundWorld.com late last year also with a view to keeping the firm’s clients better informed.
According to the Barclays Capital Asset Management Solutions Group Survey, 70% of investors were interested in re-deploying cash by the end of the second quarter 2009 and of those surveyed, 88% said they remain opportunistic and would continue to fund allocations. The survey also showed that cash withdrawals have slowed and is now more in keeping with the long-term industry average.
‘So whilst we know that we will continue to see investment managers dealing with the challenges of the current economic market, we still remain confident about the industry overall’ said Mrs. Harris.
As such, the firm has recruited back attorney Nick Reid, who has worked in the firm’s investment funds group previously before moving to Dubai to work with Al Tamini and Company, where he also specialized in investment funds. Mr. Reid is returning to Solomon Harris to work in the firm’s Swiss office.
‘We are delighted that Nick has decided to rejoin us,’ said Mr. Scrivener.
‘He is a first-rate funds lawyer and the experience he gained in Dubai only adds to his skill-set. Nick will be our third lawyer in Europe and we know that he is going to make an invaluable contribution to our team there.’