ESMA approves Jersey AIFMD cooperation agreement to ensure ongoing funds business into Europe

The European Securities and Markets Authority (ESMA) has approved a cooperation agreement with Jersey to ensure it can continue to deliver alternative investment funds business into Europe after the introduction of the EU Alternative Investment Fund Managers Directive (AIFMD) in July.

ESMA’s Board of Supervisors approved the Memorandum of Understanding (MoU) at its 22 May meeting. ESMA negotiated the agreement on behalf of all 27 EU Member State securities regulators as well as the authorities from Croatia, Iceland, Liechtenstein and Norway. The agreement, which will be signed by John Harris, Director General of the Jersey Financial Services Commission, enables alternative investment fund managers using Jersey to continue to seamlessly market into Europe through private placement rules until at least 2018.

In April this year, specific regulations mirroring AIFMD criteria were introduced in Jersey to ensure it would comply where relevant with all criteria set out in the AIFMD. The regulations also pave the way for the creation of a European-wide passport regime for alternative investment funds in anticipation of July 2015 when European-wide marketing passports will potentially become available to non-EU Alternative Investment Fund Managers.

Mike Jones, Deputy Director of Securities, Jersey Financial Services Commission, said:

“It has always been Jersey’s intention to be in the first tranche of jurisdictions to sign this AIFMD cooperation agreement and I am delighted that, following months of preparation work and constructive engagement with ESMA and the regulators of individual EU Member States, that agreement is now in place. It puts Jersey in a very strong position and ahead of schedule in terms of the AIFMD introduction date on 22 July.”

As a non EU jurisdiction, alongside an AIFMD-compliant regime, Jersey will also continue to offer fund managers a separate regime that lies outside the scope of the AIFMD for managers wishing to market to the rest of the world.

Geoff Cook, CEO, Jersey Finance, added:

“This is a major step in ensuring that Jersey can continue to facilitate alternative investment funds business within Europe, and will give alternative investment fund managers a huge amount of confidence in using Jersey. While Jersey’s approach to the Directive will offer a seamless transition when it comes into force in July, it will also offer a welcome degree of flexibility in offering a completely separate regime for fund managers wishing to market to non-EEA countries. This is not something all international finance centres, nor any EU nations, can offer, so in this sense the Directive will actually enhance Jersey’s appeal as a specialist centre for alternative funds business.”

Nigel Strachan, Chairman of the Jersey Funds Association, commented:

“With the alternative asset classes, including hedge, private equity and real estate, accounting for almost three quarters of funds business done in Jersey, this is an extremely welcome move that secures Jersey’s position as a leading funds centre both in a European and a wider global context. Jersey has positioned itself well ahead of the game and is in a strong position to support managers and service providers ahead of the July introduction date. This also reflects once again Jersey’s commitment to complying with international standards.”

Click here to see the JFSC press release

JFSC launches AIFMD regime following agreement of ESMA MoU

Overview

The Jersey Financial Services Commission (the “Commission”) today outlines the timetable for implementing Jersey’s regulatory regime in relation to the Alternative Investment Fund Managers Directive (2011/61/EU) of the European Parliament and of the Council of 8 June 2011 (the “Directive”) following the approval of the European Securities and Markets Authority (“ESMA”) coordinated cooperation agreement on 22 May 2013.

Jersey’s response to the Directive is outlined in more detail below and comprises stand-alone Regulations, Orders and Codes of Practice.

It is important to note that the regulatory regime for Jersey investment funds, managers and depositaries falling outside the scope of the Directive remains quite separate and entirely unaltered.

Background - potential impact on Jersey

The funds sector is a significant part of Jersey’s financial services industry. Whilst not having direct effect in Jersey, the Directive impacts on the ability of Jersey investment funds, or funds to which investment management or depositary services are provided in Jersey, to be marketed in Europe.

The meaning of “alternative investment fund” (“AIF”) for the purposes of the Directive has a broader meaning than the meaning of “fund” under the Collective Investment Funds (Jersey) Law 1988 (“CIF”). This means that arrangements which are not currently treated as funds under Jersey law may fall within the scope of the Directive.

Response to the Directive – New Regulations

The Alternative Investment Funds (Jersey) Regulations 2012 (the “Regulations”) came into force in April 2013 and form an integral part of Jersey’s alternative investment fund framework. However, the Regulations are not effective until 22 July 2013, which is the implementation date of the Directive.

The Regulations provide the Commission with the necessary powers over the whole of Jersey’s investment fund platform (including private funds) enabling the Commission to sign up to the cooperation agreement.

Cooperation Agreement - steps to enable European access to continue

The cooperation agreement is required pursuant to the Directive to enable Jersey alternative investment fund managers (“AIFMs”) to continue seamlessly to market into Europe under national private placement rules until at least 2018. The agreement is between the Commission and the supervisory authorities of the relevant Member State.

The Commission has been liaising with ESMA, the party responsible for negotiating the cooperation agreement on behalf of all 27 EU Member State securities regulators as well as the authorities from Croatia, Iceland, Liechtenstein and Norway since February 2012 and is delighted that those discussions have successfully concluded. ESMA’s Board of Supervisors approved the cooperation agreement with the Commission on 22 May 2013. Whilst ESMA has negotiated the cooperation agreement centrally, it is worth noting that it is a bilateral agreement that must be signed between each EU securities regulator and the Commission.

Codes of Practice for AIFs and AIF Services Business (the “Codes”)

The Commission has prepared draft Codes for the purpose of establishing sound principles and providing practical guidance for the conduct of AIFs, AIFMs and depositaries established in Jersey who, from 22 July 2013 are either (i) managing a European AIF, or (ii) marketing any AIF in Europe.

The Commission will shortly be publishing a consultation paper in relation to the draft Codes and subject to consultation, the Codes will come into effect on 22 July 2013.

The Commission will also amend the CIF Certified Funds Codes and the Fund Services Business (“FSB”) Codes to include an additional principle which cross-refers to the relevant requirements of the Codes as far as the Codes apply to the fund or the FSB in question. The Commission will also consult publicly in relation to these proposed changes.

Jersey Eligible Investor Fund

The Commission will shortly be consulting on a Jersey Eligible Investor Fund Guide setting out the principal characteristics of an additional new type of fund devised to respond to the requirements of the Directive.

Fees

The Commission proposes to introduce a straightforward fees regime to levy fees on AIFs and service providers to AIFs which have not previously paid fees. The proposed regime will not impose any fee on any business which has previously paid a fee to the Commission in respect of its CIF or FSB activities. The Commission will shortly be publishing its consultation paper in relation to this.

Orders

Various Orders have been prepared under the Regulations, or under other legislation, which clarify the scope of application of (and exemption from) the Regulations and other legislation. The Commission expects these Orders to be finalised in advance of 

22 July 2013.

Conclusion

The timetable in relation to the Directive has been dictated by the European Union’s timetable. The Commission is grateful in advance for any comments received within the timescales set out in the various forthcoming consultation papers, which will be necessarily shorter than is usually the case.

Appleby Acquires Caledonian Isle of Man Operation

Announcing the acquisition, Sean Dowling, Office Managing Partner of Appleby (Isle of Man) LLC said: “We have continued to look for new opportunities to build on the success of Appleby Trust (Isle of Man) Limited since its establishment in 2000. The staff at Caledonian are a great fit with our team – they strive for the high standards of service our clients are used to and we are pleased to welcome them on board.

Appleby is committed to working with the Isle of Man Financial Services Commission to develop our position as an established and well-regarded player in the industry and we are delighted to offer our clients greater resources and a broader choice.”

Farah Ballands, Appleby Partner and Group Head of Fiduciary and Administration Services added: “We are excited about this latest development that will build on the strength and depth of our fiduciary team across multiple jurisdictions and reinforce Appleby’s position as the first choice for clients in the offshore sector.”

The new business will trade under the name of Appleby Fund Administration (IOM) Limited with effect from 7 June 2013 and will operate from Appleby’s office on Athol Street in Douglas. The move will see approximately 20 staff relocate to Appleby bringing the total headcount of their Athol Street office to 140. 

Sandra Georgeson, Chief Executive Officer of Caledonian, Isle of Man said: “With the recent growth across our 4 other regions and the decision to pursue new markets, the firm viewed this transaction as a well timed opportunity to refocus our global strategic positioning. Our in-depth discussions with the Appleby team confirmed our initial belief that the acquisition is a positive move, not only for our respective organisations but more importantly for our clients. The strength and quality of Appleby’s existing operation made them the obvious choice and I look forward to seeing the business continue to flourish.” 

Kobi Dorenbush - Caledonian CEO stated: "Great consideration was given to which organisation could provide our clients with the level of service they expect. We are confident that our clients and former staff will experience a positive transition into the Appleby organisation." He continued, “I wish to confirm that this acquisition is entirely Isle of Man focused and does not include any of Caledonian’s operations in the Cayman Islands, New York, Orlando or the BVI.”

Appleby Trust (Isle of Man) Limited provide a range of fiduciary services to high net worth individuals, private companies, funds and global corporations. Through our law firm in the Island, clients can also benefit from our specialised legal services in the areas of Corporate and Commercial, Litigation and Insolvency, and Private Client and Trusts.

Appleby Trust (Isle of Man) Limited is licensed by the Isle of Man Financial Supervision Commission.

FSC Mauritius announces ESMA’s approval for cooperation agreement to ensure continued funds business into Europe

The Financial Services Commission, Mauritius “FSC” is pleased to announce that the European Securities and Markets Authority “ESMA” has approved a cooperation agreement with the FSC. This agreement will enable Mauritius-licensed funds to continue to market in Europe under the private placement regimes of EU Member States after the introduction of the EU Alternative Investment Fund Managers Directive “AIFMD” on 22 July 2013.

The Memorandum of Understanding (MoU) was approved by ESMA’s Board of Supervisors at its meeting held on 22 May 2013. ESMA negotiated the agreement on behalf of all 27 EU Member State securities regulators as well as the authorities from Croatia, Iceland, Liechtenstein and Norway.

Ms Clairette Ah-Hen, Chief Executive of the FSC, who will soon sign the agreement stated that: “The ESMA MoU reaffirms the FSC’s commitment to the highest standards in international engagement and information sharing. This milestone is set to contribute towards sustaining the Mauritius International Financial Centre (IFC) as an attractive jurisdiction for basing funds. The FSC looks forward to working with ESMA counterparts.”

Financial Services Commission

30 May 2013

BCG - Global Wealth 2013: Maintaining Momentum in a Complex World

The global wealth-management industry is becoming increasingly complex. With the mature economies of the “old world” and the developing economies of the “new world” moving at different speeds, wealth managers in different regions are grappling with complicated sets of problems. In essence, the core challenge in the old world is how to make the most of the modest growth that is expected in traditional markets, while players in the new world are trying to capture a substantial share of the wealth that is being created in rapidly developing economies. Diverse strategies will be required on either side of the divide to succeed—and to maintain the overall momentum that the industry realized in 2012.

At the same time, regardless of their home market or principal region of activity, wealth managers globally still have much in common. All must find ways to gather new assets, generate new revenues, manage costs, maximize IT capability, comply with regulators, and find winning investment solutions that lead to deep and long-standing client relationships. Indeed, the battle for success in this increasingly complex industry landscape will intensify throughout the rest of the decade.

In Maintaining Momentum in a Complex World: Global Wealth 2013, which is The Boston Consulting Group’s thirteenth annual report on the global wealth-management industry, we explore the current size of the market, the present state of offshore banking, and the performance of leading institutions in a wide range of categories. We also thoroughly assess the key trends that are shaping the industry landscape, as well as outline steps that wealth managers must take to position themselves advantageously. Our goal, as always, is to present a clear and complete portrait of today’s wealth-management industry, as well as to offer thought-provoking analysis of issues that will affect all types of wealth managers as they pursue their growth ambitions in the coming years.

Appleby - Futter v HMRC and Pitt v HMRC: An Offshore Perspective

On 9 May 2013 the Supreme Court of England and Wales handed down its judgment in the jointly heard appeals of Futter v HMRC and Pitt v HMRC [2013] UKSC 26. The judgment has provided the courts of England and Wales with certainty on the so-called “rule in Hastings-Bass” and on the setting aside of voluntary dispositions on the grounds of mistake. 

The judgment does not have a direct impact upon offshore jurisdictions, but those working in the fiduciary industry will inevitably wish to take note of the Supreme Court’s decision, of the potential for offshore courts to follow suit and of the possible legislative responses. In this article Private Client & Trust experts Carlos de Serpa Pimentel and John Rimmer seek to explain the key findings of the Supreme Court and what they may mean for those working offshore.

ActionAid : Almost half of all investment into developing countries goes through tax havens

Almost half of all money invested in developing countries is channelled through tax havens, a new ActionAid report revealed today.

The report, How Tax Havens Plunder the Poor, shows how tax havens can often allow companies and investors to avoid tax on the resulting profits and gains – depriving the world’s poorest countries of much-needed tax revenue.

The research also shows that foreign investments into developing countries are more likely to be routed through a tax haven than investments into developed countries.

Mike Lewis, ActionAid’s tax expert who carried out the research, said:

“As we have seen with recent cases like Google and Amazon, tax avoidance is a huge issue here in the UK. But evidence shows that poor countries are losing even more from tax avoidance, and are least equipped to protect fragile public revenues.

“Developing countries are being deprived of billions of dollars of tax revenue by wealthy corporations and investors using secretive tax havens. Tax havens are one of the main obstacles in the fight against global poverty. Their secrecy and harmful tax regimes leach money out of developing countries that could be used to end hunger and provide hospitals, schools and clean water.”

In one case a single - entirely legal - transaction through UK-linked tax havens would have provided $2.2 billion in tax if it had not taken place offshore, according to the Indian government. This is almost enough money to provide every Indian primary school child with a subsidised midday meal for an entire year.

In another example, one major mining firm gets 84 per cent of its revenues from Africa, yet has just four of its 81 subsidiaries registered in African countries, and 47 registered in tax havens.

Using tax havens is not illegal or proof of tax avoidance, but can often allow companies to minimise taxes and keep financial transactions opaque.

ActionAid’s report comes shortly before the G8 Summit in June when world leaders, including David Cameron, have an historic opportunity to call time on tax havens.

The UK is currently responsible for one in five tax havens globally – more than any other country. Recent research by ActionAid has also demonstrated the heavy involvement of British companies in tax haven-use with 98 of FTSE 100 companies using tax havens. G8 countries are collectively responsible for 40 per cent of tax havens.

The OECD estimates that developing countries are losing three times more money to tax havens than they currently receive in aid each year.

ActionAid welcomes the pressure that the UK government finally appears to be putting on the UK’s own tax havens in recent weeks – pushing them to join information deals with other European countries, and asking them to sign a multilateral convention on international tax cooperation. David Cameron and George Osborne have also highlighted the need for these tax haven deals to include developing countries too, but so far there is no concrete indication about how developing countries will actually be involved.

ActionAid is now calling on the Government and G8 leaders to put their words into action and mark the end of tax havens by ensuring tax havens share tax information will the poorest countries, and that the real ownership of all companies and trusts are placed on public record.

ActionAid is also part of the Enough Food For Everyone IF campaign which aims to tackle global hunger by calling on governments to close tax loopholes which enable corporates to avoid paying their fair share of tax.

WSJ - Mauritius Central Bank Chief: We're Not A Tax Haven

Offshore tax havens have become a target of public anger, and Mauritius central bank governor, Rundheersing Bheenick, said in a speech to the Official Monetary and Financial Institutions Forum that Mauritius rejects the tax haven label, despite constant attacks on its bustling financial sector by "self-appointed vigilantes" and populist politicians, particularly in India, who accuse it of helping individuals and firms hide cash from their domestic tax authorities.

Wall Street Journal

Nishith Desai Associates - Fund Directors Beware : Fiduciary Duties of Fund Directors in question!!!

In this hotline, our Funds Formation team summarizes the emerging offshore jurisprudence which suggests that the threshold of fiduciary duties to be met with by directors is shifting from “exercising supervision” to “making reasonable and proportionate efforts commensurate with the situations”. A failure to perform their supervisory role could impose severe liabilities on themselves as well as the independent directors for resultant business losses as would be seen in the case of Weavering Macro Fixed Income Fund (summarised later in this memo) where the directors were penalised with a sum of $111 million. The objective of this hotline is to highlight the roles and responsibilities of fund directors, managers and may very well also be considered by members of the investment committee in the context of the India based funds that are primarily set up in the form of a trust. In this context, we have examined some of the recent cases that directors would do well to take note of.

1.		In Puda Coal, Inc. Stockholders Litigation1, Chancellor Strine of the Delaware Chancery Court issued a bench ruling addressing the duty of independent directors. The court reasoned that outside directors are selected, not “for their industry experience,” but “because of their independence and their ability to monitor the people who are managing the company.” As a matter of brief background, Puda was a publicly-held Delaware corporation with its operations in China. The audit committee determined that the company’s chairman had inappropriately transferred the company’s primary operating subsidiary to himself. The Court held that the complaint sufficiently alleged that the former outside directors breached their fiduciary duty of loyalty by failing to discharge their overview function. Interestingly, the court observed that independent directors have a duty not to be dummy directors.
2.		In Paige Capital Management, LLC v. Lerner Master Fund, LLC.2, the Delaware Chancery Court inter alia investigated who owes ‘fiduciary’ obligations to the fund and its investors. The seed investor had a specifically negotiated ‘Seeder Agreement’ which allowed withdrawal from the fund within 3 years only upon a liquidated penalty being levied. The investor also had a more typical fund limited partnership (LP) agreement that had a usual ‘gates’ clause that enabled the hedge fund manager to restrict a withdrawal of capital if it results in more than a defined threshold of the total assets of the fund being withdrawn in a period. It so also happened that the fund manager could not secure any other outside investor in the fund, and the fund’s contributed capital significantly comprised of the seed investment. Controversy arose when the ‘gates’ were raised after the 3rd year (under the LP Agreement) to prevent the exit of the investor (as was understood under the Seeder Agreement) for preserving the management fee for the manager. If wide powers are granted to a person pursuant to the terms of their appointment, the same may make such party a fiduciary. In the concerned matter, the court observed that acting in self-interest does not absolve a governing fiduciary. Accordingly, preventing the exit of an investor for preserving its management fee is in violation of fiduciary obligation of the investment manager. The case also provides the limits of discretion that fund managers can validly exercise.
3.		It is also interesting to note the learnings from a ruling by the Grand Court of Cayman Islands in the case of Weavering Macro Fixed Income Fund Limited v. Stefan Peterson and Hans Ekstrom3 (“Ruling”). The objective is to lay down the 'standard' for directors' role in a funds context. As a matter of brief background, Weavering Macro Fixed Income Fund (“Fund”) was a Cayman Islands based hedge fund. The Fund appointed an investment manager to ‘manage the affairs of the Fund subject to the overall supervision of the Directors’. The Fund went into liquidation at which point in time, action for damages was initiated by the official liquidators against the former “independent” directors. In the instant case, the court found evidence that while board meetings were held timely, the meetings largely recorded information that was also present in the communication to fund investors and that the directors were performing ‘administrative functions’ in so far as that they merely signed the documents that were placed before them. Based on such factual matrix, the court held against the directors for wilful neglect in carrying out their duties. It was also observed that based on their inactions, the defendant directors “did nothing and carried on doing nothing”. The measure of loss was determined on the difference between the Fund’s actual financial position with that of the hypothetical financial position had the relevant duties been performed by the directors. The court ruled against each of the directors penalizing them with an amount of $111 million. It was also observed, that the comfort from indemnity clauses are for reasonably diligent independent directors to protect those who make an attempt to perform their duties but fail, not those who made no serious attempt to perform their duties at all. The court observed that the directors are bound by a number of common law and fiduciary duties including those to (1) act in good faith in the best interests of the fund and (2) to exercise independent judgment, reasonable care, skill and diligence when acting in the fund’s interests.

AT THE FUND FORMATION STAGE

1.		Directors must satisfy themselves that the offering documents comply with applicable laws, that the terms of the service providers’ contracts are reasonable and consistent with industry standards, and that the overall structure of the fund will ensure a proper division of responsibility among service providers. Directors must act in the best interests of the fund which, in this context, means its future investors. In this respect, we believe ‘verification notes’ can be generated. The notes would record the steps which have been taken to verify the facts, the statements of opinion and expectation, contained in the fund’s offering document(s). The notes also serve the further purpose of protecting the directors who may incur civil and criminal liability for any untrue and misleading statements therein or material or misleading omissions therefrom. Alternatively, a ‘closing opinion’ may also be relied upon.
DURING THE FUND’S TENURE
2.		Appointment of service providers: Directors should consider carefully which service providers are selected for appointment and should understand the nature of the services to be provided by such service providers to the fund.
3.		Agenda: The formalities of conducting proper board meetings should be observed. An agenda for such meetings should list the matters up for discussion, materials to be inspected, and inputs from the manager / members of investment committee, the service providers and directors themselves. It should be circulated in advance.
4.		Actions outside board meetings: The directors should review reports and information that they received from the administrator and auditors from time to time to independently assess the functioning of the fund and whether it is in keeping with the fund’s investment strategy.
5.		Decision making process: Directors / members of investment committee should exhibit that there was an application of mind when considering different proposals before it. For example, in case of investor ‘side letters’ that may restrict the fund’s investments into a restricted asset class, etc., could raise management issues. While execution of such ‘side letters’ may not be harmful to the fund, but an approval at ‘short notice’ may be taken up to reflect on the manner in which the directors / members of investment committee perform their duties.
6.		Minutes: Board meetings should be followed by accurately recorded minutes. They should be able to demonstrate to a reader that how the decision was arrived at and resolution thereon passed. The minutes should reflect that the directors were alive to the issues that were being discussed. Clearly, a ‘boilerplate’ approach would not work.
7.		Remuneration: The remuneration for independent directors should be commensurate to the role and functions expected to be discharged by them. While a more-than-adequate remuneration does not establish anything, an inadequate recompense can be taken as a ground to question whether the concerned director intends to perform his/her duties to the fund.
8.		Reports to the investors: The investors should be regularly updated about the events in the fund such as investments / divestments, any important occurrence in any portfolio company, etc.
9.		Conflict of interest: If related party transactions or transactions that may raise conflict of interest cannot be avoided, a policy should be outlined and disclosed to the investors where events and mechanisms to identify and resolve events which could lead to potential conflicts, should be recorded. Suitable measures that demonstrate governance and that the interest of the investors would be unimpaired, have to be adopted.

The discussed rulings confirm that a fund’s board has duties cast on it and the ‘business judgment rule’ may not shield from liability in all cases.

There are certain non-delegable functions for the directors to discharge on an on-going basis and none more paramount than reviewing of the fund’s performance, portfolio composition and ensuring that an effective compliance program is in place. These functions require action ‘between’ board meetings and not ‘during’ board meetings only.

- Sahil Shah, Richie Sancheti, Nishchal Joshipura, Pratibha Jain and Nishith Desai

You can direct your queries or comments to the authors

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^{1 C.A. No. 6476-CS (Del. Ch. Feb. 6, 2013)}

² 5502-CS, Delaware Chancery Court

³ Cause No. FSD 113 of 2010 (AJJ)

Chatham House - The Trouble with Biofuels : Costs and Consequences of Expanding Biofuel Use in the United Kingdom

Biofuel use in the United Kingdom is set to increase significantly despite continued sustainability concerns

• In the current financial year (2013/14) UK biofuel use will increase to 5 per cent of transport volumes, the highest level ever.
• An earlier government-commissioned review of UK biofuel policy recommended that biofuel use not surpass this level unless major sustainability issues are addressed. However, EU targets for 2020 would see this exceeded several times over.

Current biofuel standards do not ensure biofuel use is sustainable

• Agricultural biofuel use increases the level and volatility of food prices, with detrimental impacts on the food security of low-income food-importing countries. 
• Agricultural biofuel use also indirectly drives expansion of agriculture into areas of high carbon stock such as rainforest or peatland, resulting in indirect land-use change, the emissions from which may outweigh any greenhouse gas savings the biofuels are able to offer.
• Biodiesel from waste products such as used cooking oil or tallow offer the most favourable sustainability characteristics; however, the risk of indirect emissions increases at higher levels of use and may already be material.
• Neither indirect land-use change nor food security is addressed in UK sustainability criteria. In the absence of such safeguards, increasing biofuel consumption could have significant environmental and social consequences outside the United Kingdom. It is unclear whether such safeguards will be agreed at the EU level.

Biofuels are not a cost-effective means to reduce emissions from road transport

• The current generation of biofuels provides an expensive means of reducing emissions from road transport. Carbon abatement costs, excluding emissions from indirect land-use change, are broadly in the range of $165–$1,100 per tonne of carbon dioxide equivalent (CO2e). This compares unfavourably with an appraisal price of around $87 per tonne.
• Accounting for emissions from indirect land-use change increases abatement costs for agricultural biofuels to between $330 and $8,500 per tonne of CO2e depending on the feedstock used. Biodiesel from vegetable oils is found to be worse for the climate than fossil diesel.
• The 5 per cent biofuel target is likely to cost UK motorists in the region of $700 million (£460 million) in the current financial year (2013/14).
• If the UK is to meet its EU obligations, the annual cost to UK motorists is likely to rise to around $2 billion (£1.3 billion) a year by 2020.

Download paper here

Outrigger Acquires Mauritius Beachfront Property

Hawaii-based Outrigger Hotels and Resorts announced today that it has purchased from Dubai-based Kingdom Hotel Investments the 181-key Mövenpick Resort and Spa Mauritius, which is located in the island nation of Mauritius in the Indian Ocean. The transaction closed on May 29, 2013, for an undisclosed amount. 

“This acquisition marks the exciting new expansion of Outrigger into the Indian Ocean,” said David Carey, president and chief executive officer at Outrigger Enterprises Group. “With over 66 years of experience in tropical resort destinations, our acquisition of this beautiful, absolute beachfront property in the south of Mauritius fits perfectly with our expansion strategies. We plan to have Outrigger resorts in the best beachfront locations in the best resort destinations in the Asia-Pacific region,” he said. 

The property closed on May 29 for an extensive six-month renovation and revitalization that will touch all guest rooms, public areas and grounds. The hotel will reopen by the end of the year as the Outrigger Mauritius Resort and Spa. 

The Outrigger Mauritius Resort and Spa sits on the southwest coast of the Republic of Mauritius, located roughly 2,000 kilometres off the southeast coast of Africa. Just a 45‑minute drive from the international airport and a similar distance from the capital of Port Louis, the resort is surrounded on three sides by the nature preserve of Bel Ombre. All 181 rooms face the ocean, offering views of the resort’s white sand beach and the turquoise waters of the Indian Ocean. 

When it reopens, the resort will have three swimming pools, a 1,800 square metre spa, three restaurants, and a children’s club and pool. The renovated resort also will have an exclusive Club level of guest rooms and suites with all the personal touches that Club guests are accustomed to receiving. 

The Outrigger Mauritius Resort and Spa will be the first property for Outrigger in the Indian Ocean. Since starting its expansion into the Asia-Pacific region in 2008, Outrigger has grown its presence to include properties currently open or under development in Bali and Phuket, Thailand, the two most popular resort destinations in Asia; as well as in Phi Phi Island, Thailand; Sanya, Hainan Island, China; and Quy Nhon, Vietnam. 

“The Outrigger Mauritius Resort and Spa will reflect the hospitality, warmth and flavours of Mauritius,” said Darren Edmonstone, Outrigger managing director, Asia-Pacific. “The property is well suited for families and couples seeking a luxurious beach holiday in a peaceful and welcoming cross-cultural setting for which this island nation is so famous.”

New AfDB-GFI Joint Report: Africa a Net Creditor to the Rest of the World

A new joint report by the African Development Bank (AfDB) and Global Financial Integrity (GFI), launched Wednesday at the 48th AfDB Annual Meetings in Marrakech, Morocco, reveals that the African continent has been a long-term net creditor to the rest of the world. The report, finds that Africa suffered between US$597 billion and US$1.4 trillion in net outflows between 1980 and 2009 after adjusting net recorded transfers for illicit financial outflows.

“The resource drain from Africa over the last 30 years—almost equivalent to Africa’s current GDP—is holding back Africa’s lift-off,” said Prof. Mthuli Ncube, Chief Economist and Vice-President of the African Development Bank.

“The traditional thinking has always been that the West is pouring money into Africa through foreign aid and other private sector flows, without receiving much in return. Our report turns that logic upside down – Africa has been a net creditor to the rest of the world for decades,” said Raymond Baker, President of GFI, a Washington-based research and advocacy organization.

Findings

Prepared by a joint team consisting of GFI Chief Economist Dev Kar, GFI Economist Sarah Freitas, AfDB Senior Economist Jennifer Mbabazi Moyo, and AfDB Economist Guirane Samba Ndiaye, the study finds that cumulative illicit financial outflows from the African continent over the 30-year time span ranged from between US$1.2 trillion to US$1.3 trillion in real terms. These unrecorded illicit outflows considerably swamped cumulative net recorded flows over the same period. As such, cumulative net resource outflows from Africa ranged from US$597 billion to US$1.4 trillion between 1980 and 2009.

Titled “Illicit Financial Flows and the Problem of Net Resource Transfers from Africa: 1980-2009,” the report does not consider the drivers behind the illicit financial outflows, noting that country-specific case-studies would have to be performed to determine the underlying causes, which likely vary between African nations. Also, much of the proceeds of drug trafficking, human smuggling, and other criminal activities—which are often settled in cash—are not included in this work.

However, the AfDB and GFI note that such significant transfers of capital out of the continent are likely to have a negative effect on economic development.

“The African continent is resource-rich. With good resource husbandry, Africa could be in a position to finance much of its own development,” said AfDB’s Ncube.

“More than one trillion dollars flowed illicitly out of Africa over the past 30 years, dwarfing capital inflows, and stifling economic development,” noted GFI Chief Economist Dev Kar, who previously served as a senior economist at the IMF. “Curtailing these outflows should be paramount to policymakers in Africa and in the West because they drive and are, in turn, driven by a poor business climate and poor overall governance, both of which hamper economic growth.  The slower growth rate results in more aid dependency with foreign taxpayer funds filling the shortfall in domestic revenue—to the extent that tax evasion is a part of illicit flows.”

Policy Recommendations

The AfDB and GFI offer a number of policy recommendations for boosting net resource transfers from Africa and curtailing illicit financial flows.

“The time for concerted action is now, with clear roles for national and international actors. African countries need to accord policies to stem these flows the same urgency as other priority policy measures. Countries should go beyond the Extractive Industries Transparency Initiative to ensure transparency along the entire resource value chain, as well as establish well-functioning Sovereign Wealth Funds,” said Issa Faye, Manager in the African Development Bank’s Research Department.

“For every country losing money illicitly, there is another country absorbing it. These outflows are facilitated by financial opacity in advanced Western economies and offshore tax havens. Implementing transparency measures to curtail tax haven secrecy and anonymous shell companies is crucial to curtailing illicit flows,” added GFI’s Baker.

Measures recommended to boost net resource transfers into Africa and curtail illicit financial flows from the continent include, among other things:

• Requiring banks and tax havens to regularly report to the Bank for International Settlements (BIS) detailed deposit data by sector, maturity, and country of residence of deposit holders. The BIS must be permitted to widely disseminate this cross-border banking data for specific source and destination countries, ideally making the data publicly available on its website or, at the very least, to civil society and researchers.
• Addressing the problems posed by anonymous shell companies, foundations, and trusts by requiring confirmation of beneficial ownership in all banking and securities accounts, and demanding that information on the true, human owners of all corporations, trusts, and foundations be disclosed upon formation and be available in public registries;
• Ensuring that the anti-money laundering regulations already on the books are strongly enforced;
• Requiring the country-by-country reporting of sales, profits, employee levels, and taxes paid by all multinational corporations;
• Pursuing the automatic cross-border exchange of tax information on personal and business accounts—ideally on a multilateral basis as a number of European nations have announced they will begin doing;
• Addressing capacity issues and corruption domestically within African tax authorities;
• Reforming customs departments to better detect and deter trade misinvoicing;
• Encouraging resource-rich countries to establish well-functioning Sovereign Wealth Funds (SWFs), while joining the Open Budget Initiative, the Collaborative Africa Budget Reform Initiative (CABRI), and the Extractive Industries Transparency Initiative (EITI);
• Empowering national authorities for the regulation and management of public procurement; and
• Implementing policy measures to boost net recorded transfers by improving the business climate.

IMF Working Paper - Foreign Investors Under Stress : Evidence from India

Emerging market policy makers have been concerned about the financial stability implications of financial globalization. These concerns are focused on behavior under stressed conditions. Do tail events in the home country trigger off extreme responses by foreign investors – are foreign investors `fair weather friends'? In this, is there asymmetry between the response of foreign investors to very good versus very bad days? Do foreign investors have a major impact on domestic markets through large inflows or outflows – are they ‘big fish in a small pond’? Do extreme events in world markets induce extreme behavior by foreign investors, thus making them vectors of crisis transmission? We propose a modified event study methodology focused on tail events, which yields evidence on these questions. The results, for India, do not suggest that financial globalization has induced instability on the equity market.

Working Paper No. 13/122

Werksmans’ Legal Briefs : South Africa renegotiates double tax agreement with Mauritius

The much-anticipated renegotiated double tax treaty with Mauritius was recently signed and disclosed to the public. The new treaty, which is expected to come into effect in 2015, will impact several existing tax structures.

Tax E-Bulletin

Guernsey provides AIFMD flexibility

Guernsey's funds industry will offer flexible options when the Alternative Investment Fund Managers' Directive (AIFMD) is introduced, an audience of fund specialists was told.

A panel of experts from Guernsey and London shed light on topics ranging from delegation and marketing to the remuneration rules at an event in the City of London.

Ben Morgan, a partner at offshore law firm Carey Olsen, said that Guernsey ultimately offered "optionality and flexibility".

He said: "We are still seeing a steady inflow of some types of business. For example, in the case of Cayman hedge fund structures, managers are switching management operations into Guernsey to keep their operations out of the EU for AIFMD purposes where Guernsey is able to offer an easily accessible base for the discharge of management responsibilities in a non-EU setting.

"There are still groups that haven't made any leap one way or the other which is understandable, given the uncertainties that exist. They are all working out who their Alternative Investment Fund Manager (AIFM) is and monitoring how the directive is to be implemented in various jurisdictions, which is still challenging."

His view was that it would be wrong to assume that all existing Guernsey funds will opt to be self-managed and therefore be non-EU AIFM managed. Some will want their UK operation in the EU to be the AIFM and will therefore have the option to be AIFMD authorised.

There was a continued appetite for establishing General Partner companies for LP structures in Guernsey and this was not expected to change. There was also an emerging trend to start off as a non-EU AIFM but retaining the option to switch to an EU AIFM at some point in the future.

Robin Fuller, a director of Dexion Capital (Guernsey), looking at delegation and outsourcing, reviewed the manager intentions regarding substance in the AIFM. The AIFM must not delegate to the extent that it becomes a letterbox entity and the liability of an AIFM to the investors will not be affected by the delegation of any function to a third party. Rather, delegation must be justified on objective reasoning and the delegate must have sufficient resources and experience.

"It's very long and prescriptive about what the manager must do but it doesn't say how you should do it. The board needs to demonstrate that it is in control of all the functions but that doesn't mean it has to do them all. A lot of it is subjective and qualitative and we need to exploit that in order to control costs and have a fit to existing business," said Mr Fuller. 

However, the board cannot delegate responsibility for investment and risk management.

John Cotton, a director of Deloitte, said that the Financial Conduct Authority (FCA) guidance on AIFMD remuneration has now been delayed until after the 22 July AIFMD implementation date. 

"You have remuneration rules which will apply from the moment firms apply for authorisation but, in the absence of further guidance, firms will have to make 'best efforts' to comply," said Mr Cotton.

He said that many of the remuneration rules will not apply to non-EU AIFMs, however if marketing in the UK, they will still need to include in their annual AIF report aggregate remuneration levels for all "identified staff" and disclose certain details of remuneration policy and practices.

Nish Dissanayake, a senior associate at Herbert Smith Freehills, tackled the topics of scope and marketing. He clarified that the directive regulates the alternative investment managers, rather than the funds but that an understanding of what constitutes an AIF is a fundamental question.

Mr Dissanayake cited the FCA's draft perimeter guidance as being very helpful in determining certain borderline cases, giving the example of certain debt issuing vehicles. He noted, however, that differences in interpretation by different regulators can lead to difficulties in certain situations.

He added that the marketing of AIFs was not about inducements, but rather the availability of shares and emphasised the importance of mapping out now which jurisdictions funds would be marketed in, so that would-be AIFMs can plan accordingly.

Conference chairman Ian Morley concluded the event by reiterating the lack of clarity around the Directive, saying: "We are not necessarily any the wiser, but we are better informed."

The Economist: Indian banks - Lenders of the last resort

India is considering letting its business houses run banks. It should think twice

Banking in India is a vast problem and a huge opportunity. Only 35% of adults have formal accounts. A grim reminder of the risks for the 600m-odd unbanked folk came in April. A multi-billion-dollar, barely regulated, “chit fund” in Kolkata collapsed, destroying the savings of hundreds of thousands of poor people. Up to a dozen committed suicide, one by immolation.

The Economist

Offshore Jurisdictions (Including Cyprus), Corruption Money Laundering and Russian Round-Trip Investment

In this paper we analyze the link between corruption money laundering and round-trip investment via offshore jurisdictions utilizing Russian firm-level data. In particular we empirically explore location strategies of round-trip investors (namely, from Cyprus and British Virgin Islands) across Russia and compare them with the benchmark group of genuine foreign investors in Russia. We further study the determinants of the fraction of round-trip investment in total foreign investment in Russian regions. We find that round-trip investors tend to locate in more corrupt Russian regions than their genuine foreign counterparts and the fraction of round-trip investment is also significantly higher in corrupt regions. Taking into account that a large fraction of round-trip investment in Russia is concentrated in real estate and financial sectors, our results point to the conclusion that there is a strong link between round-trip investment and corruption money laundering.

Ledyaeva , Svetlana, Karhunen, Päivi and Whalley, John, Offshore Jurisdictions (Including Cyprus), Corruption Money Laundering and Russian Round-Trip Investment (May 2013). NBER Working Paper No. w19019

Playing the tax game

Some of our best-known — and best-loved — firms enjoy a free ride. It’s time to make them pay their dues, write John Arlidge and Jon Ungoed-Thomas

Asif al-Najjar runs the Surf ‘n’ Click internet coffee bar in west London. His chalkboard menu tempts customers with danish pastries, french fancies and Italian coffee.

He does not offer the Dutch sandwich or the double Irish — but is beginning to think he should. “I pay 23% business tax. Starbucks next door pays almost nothing. It’s not fair,” he says.

AU Summit: PM Announces that Mauritius Will Offer 50 Scholarships to African nationals

The Prime Minister, Dr. Navinchandra Ramgoolam, announced on Saturday 25 May in Addis Ababa, Ethiopia, that the Government of Mauritius will offer 50 scholarships to nationals of the African Union (AU). This was during his address at the opening of the conference within the AU Summit celebrating the 50th anniversary of the AU – known prior to year 2000 as the Organisation of African Unity.

The Prime Minister highlighted the importance of the development of human resources in Africa as an essential condition for the economic success of this continent. It is in this context, he said, that the Mauritian government has decided to offer 50 scholarships to African nationals. The President of the AU Commission, Mrs. Nkosazana Dlamini Zuma, congratulated such decision, at the closing of the first round of discussions.

According to Dr. Ramgoolam, Africa, which was once described as a continent of doom and gloom, is currently witnessing a deep and rapid transformation contrasting with the prevailing uncertain climate elsewhere. The Prime Minister mentioned figures to show that the African continent is now in a better and more robust economic health. This has allowed the emergence of a middle class of some 300 million people.

Almost all the Heads of States and Governments of Africa participated in the AU Summit in Addis Ababa. The American Secretary of State, John Kerry, the French President François Hollande, the Prime Minister of Jamaica and the Indian Vice-President were also present for the celebrations of the 50 years of the creation of the AU.

Africa Day – Mauritius’ appurtenance to the OAU/AU contributed to economic progress of Member States

Mauritius’ appurtenance to the OAU/AU (Organisation of the African Unity/African Union) and its commitment to the integration of Africa have enabled the country to contribute, in its own modest ways, to the search for collective solutions for peace and democracy and for the economic progress of AU Member States, states the message of the Ministry of Foreign Affairs, Regional Integration and International Trade, on 25 May 2013 on the occasion of Africa Day.

The message stipulates that at the same time, Mauritius has enjoyed the strong and unequivocal support from the OAU/AU in its rightful demarches for the country to effectively exercise its sovereignty over the Chagos Archipelago. The fact that the destiny of Mauritius remains closely intertwined with that of the African continent, not only for reasons of history and geography, but also as a matter of strategic choice, is also highlighted in the message.

The Anniversary of the Founding of the Organisation of the African Unity (OAU), now known as the African Union is celebrated on every 25 May all over Africa.  Africa Day is not only celebrated in Africa but also by the African Diaspora around the world.

The 50th anniversary of the establishment of OAU/AU, celebrated this year, thematically anchored as the Year of Pan-Africanism and the African Renaissance, is cause for celebrations and reflection, starting with a special tribute to the generation of Pan-Africanists and the founding fathers of the OAU.

These Golden Jubilee Celebrations are a defining moment which provides Mauritius with an excellent opportunity to re-affirm its engagement with the Continent and to uphold the aspirations of its peoples.

About OAU

It is recalled that the OAU was founded in 1963.  The OAU’s initiatives paved the way for the birth of AU.  In July 1999, the OAU’s Assembly decided to convene an extraordinary session to expedite the process of economic and political integration in the continent.  Since then, four Summits have been held leading to the official launching of the African Union.  The African continent witnessed the transformation of the OAU to the African Union in 2002.

Mauritius joined the OAU immediately after independence.

European Family Office & Private Wealth Management Forum

Following the success of Opal Financial Group's annual Family Office/Private Wealth Management Forum in the United States, we will bring this event back to Europe in 2013.The event will be held in the charming lakeside city of Geneva, Switzerland. A part of the Private Wealth Series, this family office conference is Opal's premier event for high net worth individuals and family offices. Private investors and asset managers from around the world will visit this picturesque setting for three days of engaging discussions on the latest investment trends.

The private wealth conference will explore the challenges and opportunities associated with investing in emerging markets, alternative investments, real estate, global credit & fixed income markets along with numerous other asset types.

Conference Day 1: Wednesday, 5 June 2013

7:30 Exhibit Setup 9:30 Continental Breakfast 9:00 Co-Chair Opening Remarks 10:15 International Private Wealth Discussion: This panel is comprised of Family Office Investment Professionals and to discuss the current state of the family office as well as the future investment cycles ahead. European family offices and these increasing challenges in servicing the US aspects of their families' businesses Is FATCA forcing a separation between US and Non-US businesses Direct Investing From a Family Office Perspective Moderator:Executive Director, STRATEGIC INVESTORS (SIFIRM) Panelist: President, PEPPER INTERNATIONAL (MFO) Principal, MARCHI GROUP Founding Partner, GOLDROCK CAPITAL 11:00 Robust Investment Styles and Strategies for Invigorating your Portfolio Returns  Taking a look at the next 12 to 36 months. What income generating strategies would work best? What asset classes/investment strategies are likely to produce best risk adjusted returns? What are the major risks that keep you awake at night? What the early red flags that will signal trouble ahead? Are Emerging markets fizzling out?  Moderator: CEO & CIO, CAPITAL GROWTH MANAGEMENT (MFO)Panelists:Managing Member & Portfolio Manager, SCHULTZE ASSET MANAGMENT CEO, S.A.G.E. SA Managing Director, ABSOLUTE CAPITAL GROUP SA Partner, SOLESA 12:00 Meet the Manager ShowcaseIn this session six investment managers will present their individual investment strategies to the congregation. Each manager will have ten minutes to speak about their background, strategy, methodology and performance of their funds. It is suggested that they present for eight minutes and have a Q&A session from the audience for the following five minutes. Chairman:Managing Director, Investment Management, DHANDSA FAMILY OFFICE/HFIM Panelists: CEO, WEATHERLY INTERNATIONAL Head of Investor Relations, PROLIFICO GROUPCEO and Chief Investment Officer, GRAFTON ASSET MANAGEMENT CIO, ALPHA4X ASSET MANAGEMENTManaging Director, Senior Portfolio Manager, LIBERTYVIEW CAPITAL MANAGEMENTManaging Partner, ATLANTIC CREEK REAL ESTATE PARTNERS LLC 13:00 Welcome Luncheon 14:30 Investing Abroad-identifying and securing investment opportunities outside the European MarketModerator: Principal, MAJLIS INVESTMENT MANAGEMENTPanelists:Partner, BEARING CONSULTINGChief Executive Officer, INVESTIGATIVE MANAGEMENT GROUPPartner, NAOPIM FAMILY OFFICE 15:15 Head of Energy Strategy, CITI INVESTMENT RESEARCH, CITI 15:35 President and CEO, TEXAS COASTAL ENERGY 15:55 Afternoon Refreshment Break 16:15 Opportunities in Credit for your Family Office portfolioModerator: CIO, HALKIN INVESTMENTS LLPPanelists:Managing Director, 3i DEBT MANAGEMENT CIO, LNG CAPITAL 17:00 Investing in Hedge Funds to Boost your portfolio returnsModerator: CEO, ALLENBRIDGE INVESTMENT SOLUNTIONS LLP Panelists: Director, RBC CAPITAL MARKETSManaging Director, MONSOON ALTERNATIVE INVESTMENTS LLP 17:45 How have Managed Accounts grown since the Financial Crises The demand for liquidity and portfolio transparency Wish for more control from the client on portfolio design and investment selection Increased expectations with regard to quality and depth of portfolio monitoring Better control on speed and level of capital deployment as well as liquidity Increased focus on risk management tools Lower fees and costs Build-up of in-house know-how over term to be less dependent upon financial services providers Better performance vs. usual financial products Moderator: Managing Partner, RIAM ALTERNATIVE INVESTMENTS  Panelist: Managing Partner, UK, EVEN KEEL ADVISORS LTDManaging Partner, SUSSEX PARTNERS 18:30 Welcoming Cocktail Reception Sponsored By: TEXAS COASTAL ENERGY  Luxury Partnership: DAVIDOFF

Conference Day 2: Thursday, 6 June 2013

7:45 Continental Breakfast 8:45 Opening Remarks Chief Executive Officer/Chairman, WENTWORTH HALL CONSULTANCY 8:55 Standalone 9:15 PhilanthropyGiving or investing? What is the best way to contribute to a better world? Moderator: Founder, JBJ CONSULT Panelist: Chief Executive Officer and Founder, INSAAN GROUP  Managing Partner, LGT VENTURE PHILANTHROPY  Head of Individual Giving, LOUVRE MUSEUM ENDOWMENT FUND Chairman, OLIVER ROTHSCHILD CORPORATE ADVISORS Development and Philanthropy Manager, LOUVRE ENDOWMENT FUND 10:15 How Risky is Investing in Emerging Markets? Where are the best places to invest in 2013 for long and short term returns? After the Arab Spring, what next? Democratization and Capitalism, are these good models for a region in flux Investment by strategy or theme, what is working Is KSA reforming New PE mandates internally. Was it a spring or fall? Moderator: Chairman, Q&A CONSULTING Panelists: Designer of the Ethical Water Exchange, PRANA SUSTAINABLE WATER Investment Manager, BALKAN EMERGING FRONTIERS FUND, SP Chief Executive Officer, AL-GHURAIR INVESTMENTS Chief Investment Strategist, EMIRATES NBDHead of Fixed Income, EMIRATES NBD 11:15 Refreshment Break 11:35 Precious Metals Funds: A Golden Opportunity? Market definition: commodity exposures of broad-based market indices Return components to commodity-based futures Performance: long term risk/reward tradeoff as a standalone asset class Portfolio Construction Paradox Implementation: passive (long only) vs. active (long/short) Moderator:PRIVATE INVESTOR  Panelists: Chairman & CEO, AL HAYAT GROUPManaging Director, SHORELINE GLOBAL INVESTMENTS INC. 12:05 Proper Asset Allocation for providing the best returns over the long term. Moderator:  Centre for Alternative Investments & Risk Management, ZURICH UNIVERSITY OF APPLIED SCIENCES  Panelist: Senior Economic Advisor, SOVEREIGN WEALTH FUNDCEO, VOGT CONSULTInvestor Relations Manager, SAEMOR CAPITAL 12:40 CEO, 3i DEBT MANAGEMENT 13:00 Luncheon 14:30 Real Estate Opportunities: Where is the industry headed in 2013 America, the new Eldorado? Is there still money going into European real estate? Risks and impact of new regulatory changes on real estate funds and investors AIFM (Alternative Investment Fund Managers Directive, Europe) FATCA (Foreign Account Tax Compliance Act, US) Debt funds - temporary craze or lasting phenomenon? There risks of not investing in real estate. Moderator: Group President & Founder, AL MIDAS INTERNATIONAL GROUP (SFO) Panelists:Managing Partner, JBW PARTNERS, GENEVA JERSEY FINANCE Founder & CEO, SOUTH EAST CONTINENT UNIQUE REAL ESTATE (SECURE)CEO, WHITESTONE REIT 15:45 Bull or Bear for Fixed Income Markets? Find the Right Fixed Income Strategy to Navigate through the Uncertainty Setting the stage - are we in a bond bubble? What can a fixed income allocation provide for a family office portfolio? Which parts of the fixed income universe might family offices consider? Opportunities in Government debt markets - developed or emerging, local currency or hard currency? Opportunities in Corporate credit markets - investment grade or high yield, developed or emerging? Other credit opportunities - are credit hedge funds, direct lending and asset backed debt too exotic for family offices? Moderator:Senior Investment Consultant, TOWERS WATSON Panelists: Partner, MUSST InvestmentsManaging Director, Senior Portfolio Manager, LIBERTYVIEW CAPITAL MANAGEMENT 16:30 Oil & Gas How much should investors in oil and gas be concerned with the recent commodity price correction? On what part of the oil and gas sector should investors be most focused? Current trends in oil and gas financing Should investors be looking at specific geographies for exposure? Moderator: Managing Partner, ALTERNATIF INVESTMENTS Panelists:Sr Vice President - Business Development, TEXAS COASTAL ENERGY Chairman, ALL AMERICAN OIL & GAS   17:30 Private Equity and Family Business Accessing Private Equity Service Provider Update on Industry Trends for Private Equity Performance Drivers for PE Investments Developments in the European Private Equity Landscape  Moderator: Managing Director, MY GLOBAL ADVISOR Panelists: Director- Investments, CIR S.P.A. Director/Principal, ECOPROSPERITY CAPITAL LTD. Partner, EDGAR BRANDT ADVISORY SA 18:30 Cocktail Reception Sponsored By: 3I DEBT MANAGEMENT

Conference Day 3: Friday, 7 June 2013

9:00 Private Closed Door Breakfast Roundtable:  "Family Governance and Sustainable Wealth: Planning for the Next Generations" Family Office And Multi -Family Offices ONLYThis private, closed-door session will be organized for foundations, family offices, multi-family offices, and accredited high-net worth individuals to address issues these organizations/individuals endure day-to-day. Three Advisory Committee members will lead workshop discussions on areas of specific concern. No managers will be allowed in the session, no exceptions.Roundtable Discussion:Succession Planning: Protecting Your Family's Well Being for Years to Come Chief Executive, AH LODER ADVISERS President, MACK INTERNATIONAL, LLC 10:00 Welcoming RemarksFAMILY OFFICE ADVISOR 10:05 Keynote Speaker:  A GOVERNANCE FRAMEWORK DESIGNED FOR DYNAMIC ASSET ALLOCATION- CEO, CERN Pension Fund, CERN | European Organization for Nuclear Research, PRIVATE FAMILY OFFICE 10:25 “May You Live in Interesting Times” Chairman of the Board of Directors, BPA INTERNATIONAL GROUP 10:45 What are some of the Legal & Accounting challenges facing Family Offices? Changes in domestic legislation i.e. Switzerland and Europe. How do these effect family offices? Are you seeing a move from banks to Family offices due to lack of transparency Tax issues do they affect the place of management and residence of families. Is there are difference legally between being a single family office or multiple family office Moderator: Chariman, ANTHONY & CIE (MFO)Panelists: Senior Associate, BEDELL CRISTIN GUERNSEY Managing Partner, BREEDY HENDERSON LLP CEO, ANGLO CAPITAL LIMITED 11:30 Are there alternatives to the stand-alone family office? At what stage should a family look into setting up a Multi Family Office How large of a role should your advisor play Moderator:  Managing Director, EGREGORE PRIVATE OFFICE Panelists: FAMILY OFFICE ADVISOR Managing Partner, ADELAIDE CONSULTING  12:15 Closing Workshop Investing to Achieve Impact and MarketRate Returns: A Case Study in Microfinance US Business Editor and New York Bureau Chief, THE ECONOMIST CEO, XACBANKCIO, Financial Inclusion Funds, BAMBOO FINANCE 13:00 Closing Remarks Luncheon Sponsored by: BPA INTERNATIONAL GROUP