GERSTEN SAVAGE RECAPS KEY TRENDS FROM
HEDGE FUNDS BEST PRACTICES CONFERENCE

NEW YORK, Dec. 4, 2007 – Best practices are becoming increasingly important for hedge funds in a number of areas, concluded a recent conference organized by MARHedge/Institutional Investor in association with the Regulatory Compliance Association (RCA).  Eric R.  Roper, a senior partner and chairman of the Financial Services Group at New York law firm Gersten Savage LLP, served as moderator and was a speaker at the second annual Hedge Fund Best Practices: Operations and Regulatory Compliance, held November 14-16 in the Cayman Islands.

The conference brought together leading regulatory, legal, administrative and compliance experts to examine the latest regulations in the U.S., Europe and offshore jurisdictions, and the impact of operations on maintaining a top hedge fund. 

"There is a growing interest in best practices on the part of large and small fund managers," Roper said.  "What the conference made clear is that best practices are becoming more critical to fund management and operations in areas such as director oversight, business continuity, succession planning and employee retention, as well as regulation and compliance."

Roper summarized key points discussed at the conference:

• Best practice groups and publications are proliferating.  These include the AIM Hedge Fund Working Group and other study groups in the UK, the Managed Funds Association and a new series of due diligence courses sponsored by the Regulatory Compliance Association.
• Institutional and accredited investors want independent directors to be more involved in the oversight of fund activities, the issuance of manager reports and a fund's relationship with third-party service providers.  How directors participate in issues such as conflict of interest and the valuation of non-listed securities is important.  Participants questioned whether "name-only" directors really provide oversight and discussed how relationships between directors and fund managers can be improved.
• Continuity and disaster planning is important for both large and small fund managers, to ensure continued operations during technological breakdowns, emergencies and natural disasters.  Funds should develop and "stress test" disaster plans involving the use of alternative locations, backup data and recovery plans, the use of emergency cards and employee safe meeting places.
• Investors are looking at the use of various insurance products to ensure fund and manager/employee stability.  For example, key-man and estate planning insurance products are being applied in the area of succession planning.
• Qualified deferred compensation plans and other aggressive benefit plans should be utilized to assist in employee retention.
• The merger of the NASD and New York Stock Exchange enforcement "rule books" into the Financial Industry Regulatory Authority (FINRA) will create an integrated investment examination program.  FINRA is the largest non-governmental regulator for securities firms that do business in the U.S.  A set of unified best practices will emerge, followed by new conduct rules.  One new rule already has been enacted for senior investors, involving investor suitability and advertising to this investor category.

           
Gersten Savage, one of New York's top five independent law firms, specializes in securities regulation, general corporate law and finance.           

About Gersten Savage LLP
Gersten Savage LLP, founded in 1977, is considered one of New York City's top five independent law firms.  A full-service firm, Gersten Savage's practice groups cover corporate, finance, tax, litigation, bankruptcy, real estate, and intellectual property in the United States and throughout the world.  The firm is celebrating its 30th anniversary this year.

Gersten Savage represents issuers and broker dealers on matters ranging from private placements, public underwritings, regulatory compliance, and merger and acquisitions.  The firm also represents principals in the establishment of hedge funds and off-shore financing entities.  In addition, the firm represents start-up companies, established public and private enterprises, domestic and offshore investment partnerships, and registered investment advisors. Its international and tax planning division is able to provide a full range of legal services to its clients is enhanced by intellectual property, bankruptcy and real estate expertise.  The firm's clients span a broad range of industries, including investment banking, e-commerce, consumer products, insurance, health-care, manufacturing, importing, mining, oil and gas, distribution, and retailing.

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