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18 Oct 2007

Hedge Fund Hires New Members To Allocation Committee

The Portland City Council and the Multnomah County Commission recently appointed 2 new members to the Portland Children's Investment Fund Allocation Committee. They are respectively: Alissa Keny-Guyer, a consultant for foundations and nonprofits; and Adrienne Livingston, executive director of the Black United Fund of Oregon.

Both Keny-Guyer and Livingston have spent much of their professional careers devoted to improving the lives of others, especially the youngest and most vulnerable in our society.

The Children's Investment Hedge Fund annually allocates about $10 million to programs throughout Portland in areas of early childhood, after school and mentoring and child abuse prevention and intervention. A five-member Allocation Committee meets publicly to make funding decisions for the Fund.

In 2002 Portland voters passed Measure 26-33 creating the Children’s Investment Fund. The Fund provides approximately $10 million a year for five years to support 65 programs in early childhood development, after-school and mentoring and child abuse prevention and intervention. Programs annually help more than 10,000 of the city’s neediest children and their families so youth enter kindergarten prepared to succeed, stay engaged in school and safe after school and families most at risk for abuse and neglect receive support and intervention services.

Technology Biggest Spending Area For Hedge Funds

According to a poll of over 100 top global hedge funds (and fund of funds) managers,
collectively managing some $900 billion in assets, shows that three quarters of respondents identified technology as the biggest spending area in the next two year, for 58% of funds, expenditure on risk management systems was anticipated to be the biggest proportion of that spend.

Only 13% of respondents expect to raise permanent capital in the next two years. The most popular route is deemed to be a partial sale to an external owner. The greatest interest in raising permanent capital comes, from managers in the Far East.

David Sung of Ernst & Young's Hong Kong office said: "Given that the managers in the Far East have yet to experience the maturity of businesses in the US and Europe, the idea of having more permanent capital could be appealing as a faster means of stabilizing their asset base."

Greater transparency around the valuation process is the foremost medium-to-high level regulatory challenge for 64% of respondents in the next two years; conflicts of interest (57%) and market abuse (55%) are the next key concerns. Valuation and pricing risks were also deemed the second greatest operational risk for managers.

The survey shows that the majority of funds (80%) expect incentive fees and management fees to decrease in the next two years. Almost two-thirds also identified increased operational costs as a significant future pressure on fees over the same period.

The survey was carried out by Ernst & Young in partnership with Ipsos MORI, an independent research company, across a number of leading global hedge funds, and fund of funds managers.