Nittin Aggarwal, Beacon

Corporate governance awareness continues

The Beacon Group is an independent group of companies providing management, consulting, administration, accounting and other related services to offshore and domestic hedge funds and other international entities. It is licensed by the Bermuda Monetary Authority to provide corporate secretarial services, part of which involves offering advice to promoters and fund managers on corporate governance best practices.

That Beacon is also licensed to offer fund administration services can be beneficial.

As Nitin Aggarwal (pictured), Chairman of Beacon, explains: “Our many years of knowledge and experience as fund administrators with different investment strategies and asset classes allows us to leverage that skill when we provide directorship services and related advisory services to the same client.

“We are aware of the challenges facing our industry and are constantly kept up to date with the latest regulatory requirements in the jurisdictions we do business in and as such feel that we add a lot of value to any Boards we sit on. In particular, as a result of our knowledge and experience as a professional administrator, we are very aware of the potential risks associated with an investment fund such as compliance with AML/ATF legislation.”

Beacon serves a wide variety of clients both in Hedge funds and Private Equity, with a particular speciality for funds listed on exchanges requiring daily or weekly liquidity.

“We serve various types of structures including segregated portfolio companies, master-feeders, multi-class and side pockets, to name a few,” confirms Aggarwal. “We cater to a wide range of client sizes and are particularly attractive to investment managers who are launching new funds as we appreciate the cost sensitivity of new startups.

“We are also active in the area of corporate administration, providing clients with registered offices and annual corporate services which are complementary to our fund administration services.”

From a corporate governance perspective, The Companies Act 1981 (as amended) together with applicable common law rules is the primary source of corporate governance that Bermuda companies are subject to. Taken with specific requirements addressed in constitutional documents, shareholders or investment agreements, will determine the fabric of corporate governance standards.

As regards investment business and fund administration, various Acts such as the Investment Funds Act 2006 and the Corporate Service Provider Business Act 2012 apply to licensed entities setting out principles of corporate governance. All such entities are required to implement adequate corporate governance policies and procedures.

The regulatory landscape has changed drastically in recent years, requiring fund directors to keep pace and stay on top of the details pertaining to the AIFM Directive, FATCA, Common Reporting Standards, not to mention the oversight of a fund’s cybersecurity controls and BCP/Disaster Recovery plans.

Aggarwal confirms that Beacon generally only takes on a directorship if it is already providing that client with administration services: “When asked to provide non-executive directorship services, Beacon takes a risk-based approach ensuring that the fund is in full compliance with the latest regulations. We have become more selective before we provide directorship services, looking to satisfy ourselves that the FATCA Responsible Officer, for example, has the necessary skills and experience to fulfil the role.” 

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