By Keiter Financial Services Industry team members: Amanda Gill, audit supervisor | Scott Hoffmann, audit senior manager | Zach Webber, audit senior manager
Insights on Alternative Investment Fund Regulatory Changes and Emerging Asset Classes
The 2019 Richmond Alternative Investment forum was held at The Country Club of Virginia and was hosted by Keiter, Hirschler, ACA Compliance Group, Fleming Fund Services, and Cowen. Panelists from seven Richmond-area based alternative investment funds shared their insights on regulatory changes and emerging asset classes.
Keynote Speaker Remarks
Don Steinbrugge, Founder & CEO of Agecroft Partners
With more than 15,000 hedge funds, it is an investor’s market. Don Steinbrugge, founder and CEO of Agecroft Partners, provided some helpful insights for attracting investors. He shared how a great product with strong historic performance may result in initial meetings with investment managers but keep in mind investment managers also evaluate the organization, investment team, and philosophy during these initial meetings. He reiterated that it is important that investment companies provide both strong marketing messages and have solid distribution strategies. Mr. Steinbrugge encouraged companies to script presentations to ensure that messages were focused and anticipated and answered frequently asked questions, and provided helpful tips on building brand recognition in the market. He reminded participants that every meeting was an opportunity to “plant seeds” for future meetings with additional investors as investors frequently look to other investors’ behavior to drive decisions.
SEC Regulatory Update Panel
The first panel focused on SEC regulatory updates, and was moderated by Brian Daly of Hirschler. The discussion focused on the panelists’ recent experiences with SEC routine examinations, and gave attendees guidance on what to expect in terms of examiners’ focus areas, logistics of completing the examinations, and what the panelists did to prepare for the examinations. Common areas of focus for the panelists’ examinations included reviewing advertising materials, the “culture of compliance” fostered by firm leadership, and firm compliance with recent SEC rules designating certain clients as suitable for either investment advisory services or brokerage services. Panelists stressed the importance of buy-in from firm leadership on the culture of compliance and leadership’s presence in meetings with examiners.
Emerging Trends in Alternative Investments Panel
Aaron Bumgarner, Founder & CEO, Longleaf Conservation Capital
Brad Cummings, Founder, Trolley Venture
Ted Jasinski, Co-founder and Partner, BlackHawk Advisors LLC
Eric Massell, Senior Vice President Operations, Randolph Square
The panel featured representatives from Richmond-area based alternative investment funds with John Lentz of Fleming Fund Services serving as moderator. The discussion focused on each of the panelists specific funds as they all reflect new types of alternative investments.
Longleaf Conservation Capital
Aaron Bumgarner explained Longleaf Conservation Capital seeks to provide investors with significant returns by conserving timber land throughout the Southeast. The fund is an evergreen fund that bases its annual returns on recreational activities such as hunting, hiking, and other conservation efforts for timber land.
Brad Cummings shared that Trolley Ventures is a venture capital fund that invests in startups. The fund pools money from several investors who are interested in funding small companies but want to outsource the decision of which companies to fund.
Brad mentioned that one of Trolley’s biggest challenges is the decision of whether to re-invest in a second round of funding after the initial startup phase.
BlackHawk Advisors LLC
Ted Jasinski with BlackHawk Advisors discussed how their fund is focused on partnering with commercial real estate experts (or Park Operators) to identify, acquire, and optimize mobile home communities within the Mid-Atlantic and Southeastern regions of the United States for which they can improve infrastructure, increase occupancy, and ultimately drive value for investors.
Ted mentioned that one of the biggest attractions to this industry is that mobile home communities are relatively free from recession risk.
Eric Massell explained Randolph Square is a patent litigation fund that advances working capital to law firms during ongoing litigation. These cases can take up to three years to close, and the fund ultimately “wins or loses” based on a judge’s decision over the legality of the patent and surrounding circumstances.
Interested in attending future Alternative Investment Forums or Keiter knowledge sharing events? Check our website for upcoming events or Contact Us. We will be happy to add you to our invitation list.
The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.