NEW YORK (HedgeWorld.com)–Multibillion-dollar hedge fund firm Renaissance Technologies Corp. officially joined the ranks of those criticizing one particular aspect of the Securities and Exchange Commission proposal to require that hedge fund managers register as investment advisers.
In a Sept. 7 letter to the SEC, Renaissance Vice President Mark Silber wrote that funds of funds would be unable to comply with the rule requiring audited financial statements to be sent to investors within 120 days after the end of the fiscal year. Because the underlying funds do not provide their financials early enough to complete an audit, funds of funds need more time, according to Mr. Silber.
He favors an amendment that would extend the time frame to 180 days but only for funds of funds, not for single-manager hedge funds. If all managers have 180 days, funds of funds would have the same problem of not getting statements from underlying funds in time to meet the deadline.
“The extension to 180 days should be an exception to the custody rule which only applies to fund of funds, which must await receipt of their underlying funds’ financial statements in order to complete their own audits,” Mr. Silber wrote.
He suggests that fund of funds be defined as those that have at least 10% of their assets in hedge funds that are not affiliated with that investment adviser.
Renaissance mostly runs hedge funds, but one of its vehicles is a fund of funds. The firm participated in the SEC round table discussion on hedge funds last year–part of the process that resulted in the proposal to mandate registration for most managers (see ).
Like many large firms, Renaissance already is a registered investment adviser and therefore an SEC mandate to register would have no effect on its status in this respect. Smaller and newer managers are more concerned about the added cost and burden of being an RIA (see Previous HedgeWorld Story).
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