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BARONSMEAD WINS BEST INSURANCE FIRM 

LONDON, (June 1, 2011) Baronsmead Partners LLP (“Baronsmead”), the specialist financial risks insurance broker, has won the Award for Best Insurance Firm from HFMWeek for its outstanding performance in 2010.

The HFMWeek European Hedge Fund Services Awards 2011 recognise companies that have outperformed their peer group over the course of 2010. The awards were judged both quantitatively and qualitatively, producing final shortlists of candidates that have demonstrated financial progress, growth and genuine innovation across a number of different business areas.

Shyam Moorjani, Managing Partner, commented after receiving the award: “This award is public recognition that we are providing the right kind of service for our clients and that we are seen as leaders in our field by the industry. Our focus on client services, continued product innovation and excellent claims handling, has helped us to ensure that we keep pace with the changing market conditions and customer demand.”

Robert Kelly, Senior Partner, said: “The prestigious HFM Award is testament to the strong and market focused team we have at Baronsmead. Over the last 24 months, we have invested significant resources in our infrastructure and operations, with continued growth planned for the future. We continue to recruit and retain the very best professionals with the knowledge to understand our clients’ business requirements. The team includes a specialist insurance solicitor from a leading city law firm as our General Counsel and a seasoned Hedge Fund COO as our Managing Partner.” 

Notes for Editors

Based in London, Dublin, Guernsey, Jersey and Cayman Islands, Baronsmead is an independent, specialist risk consultant and broker providing financial risks insurance, guidance and advice to the investment management industry. Baronsmead provides managers and their funds with risk transfer protection from the legal, regulatory and operational risks they face. Baronsmead specialises in Professional Indemnity Insurance (PI), Directors’ and Officers’ Liability Insurance (D&O), Employment Practice Liability Insurance (EPLI) and Tax Liability Insurance for fund management groups covering both personal and corporate liability. It has recently launched the first of its kind UCITS Fund Directors’ and Officers’ Liability Insurance Cover.

Baronsmead’s core business is the investment management industry with the main specialism being the alternatives sector and Baronsmead has the largest dedicated hedge fund financial risks team in London.

Clients range from long established funds to start up funds. Baronsmead currently provides insurance services to over 70 hedge fund management groups and over 450 funds with combined assets under management of approximately $170 billion. As Lloyd’s brokers, Baronsmead has access to leading insurers as well as syndicates registered under the Lloyd’s umbrella. This allows Baronsmead to provide a wide spread of pricing, products and excellent account management services. 

For more information please visit www.baronsmead.com 

Contacts:

Shyam Moorjani, Managing Partner +44 (0) 20 7529 2394

Robert Kelly, Senior Partner +44 (0) 20 7529 2300

Philippa Aylmer, Business Development Manager +44 (0) 20 7529 2302

Baronsmead unveils the UCITS Fund Directors’ and Officers’ Liability Insurance Cover, a unique offering providing protection against litigation for UCITS Fund Directors.

LONDON, (March 14, 2011) Baronsmead Partners LLP (“Baronsmead”), the specialist fund insurance broker and risk consultant, today announces the launch of the UCITS Fund Directors’ and Officers’ Liability Insurance Cover, the first policy of its kind that is specifically targeted at the exposures of the UCITS fund industry.

Under the terms of the UCITS Directive, Directors of the fund management company are responsible for supporting all the activities of the fund. The UCITS Fund Directors’ and Officers’ Liability Insurance Cover protects directors against any actual or alleged breach of the eight key managerial functions: decision-making, monitoring: compliance; risk management; investment performance; capital; internal audit, financial control or supervision of delegates. Importantly, it also protects Directors against any actual or alleged breach by third party service providers for which the directors are vicariously liable.

Additionally, the UCITS Fund Directors’ and Officers’ Liability Insurance Cover protects against any actual or alleged breach of specific product rules which include the provisions relating to investments into any one open-ended fund not exceeding a maximum of 20% NAV, investment into non-UCITS open-ended funds not exceeding a maximum of 30% NAV in the aggregate, and a UCITS fund may not owning in excess of 25% of the shares or units of another single fund.

“The prospect of a claim against Directors remains a real threat and the growing popularity of UCITS funds has led to the need for an insurance product that specifically protects the Directors of the funds. The UCITS Fund Directors’ and Officers’ Liability Insurance Cover has been designed to cover claims arising out of breaches of the management and product functions prescribed in the UCITS directive.” said Robert Kelly, Founder and Senior Partner, Baronsmead.

Notes for Editors

Based in London, Dublin, Guernsey and Jersey, Baronsmead is an independent, specialist risk consultant and broker providing financial risks insurance, guidance and advice to the investment management industry. We provide managers and their funds with risk transfer protection from the legal, regulatory and operational risks they face. We specialise in Professional Indemnity Insurance (PI), Directors’ and Officers’ Liability Insurance (D&O), Employment Practice Liability Insurance (EPLI) and Tax Liability Insurance for fund management groups covering both personal and corporate liability. Our focus is solely on the investment management industry and our main specialism is the alternative sector. We have the largest specialist financial risk team in London and employ an insurance lawyer from a leading city law firm as our General Counsel and a Hedge Fund COO as our Managing Partner.

Our clients range from long established funds to start up funds. We currently provide insurance services to over 65 hedge fund management groups and over 400 hundred funds with combined assets under management of approximately $170 billion. As Lloyd’s brokers we have access to leading insurers as well as syndicates registered under the Lloyd’s umbrella. This allows us to provide a wide spread of pricing, products and excellent account management services. 

For more information please visit www.baronsmead.com

Contacts:

Shyam Moorjani, Managing Partner. +44 (0) 20 7529 2394

Robert Kelly, Senior Partner, +44 (0) 20 7529 2300

Philippa Aylmer, Business Development Manager +44 (0) 20 7529 2302

These days hedge funds never seem to be far from the glare of regulators and politicians alike, and it is the Chief Operating Officers (COOs) and Chief Financial Officers (CFOs) that are on the front line. Increasingly they are having to find ways of protecting themselves and their funds.

One way in which they are doing this is through insurance cover. Our survey on hedge fund insurance, sponsored by Baronsmead Partners LLP, was conducted with the aim of i) shedding some light on the various insurance strategies that hedge funds deploy and ii) determining satisfaction levels and service standards across the insurance market.

The survey focused on two key areas: Directors’ & Officers’ Liability (D&O) Insurance and Professional Indemnity (PI) Insurance and the findings are intended to enable COOs and CFOs to benchmark their financial risks cover against that of their peers by comparing limits and premiums. The analysis did not make a qualitative call on whether their cover or policies represent value for money.

Over the last few months, we gathered data and opinions from 50 firms via an online questionnaire and through telephone interviews. These 50 respondents represent a broad range of investment styles and manage assets ranging from US$25 million to US$25 billion. Almost half of the respondents stated that they were covered by a composite policy. Composite insurance covers both funds (D&O) and the manager (PI) under one single policy and is a popular option as it is considered to keep premium costs down; it is also popular with insurers because it restricts cover. The composite approach creates conflicts of interest between the fund and the manager and in most cases restricts a fund versus manager claim. This is important because the fund is usually the natural claimant against the manager.

Of those respondents who said they purchased either D&O or PI insurance, 86% purchased D&O and 64% purchased PI. It is surprising that the takeup rate for PI cover is not higher although this may reflect a natural suspicion of the insurance industry. Whilst the FSA has not made it compulsory to take out PI Insurance (although there is talk of this happening), there are enough reasons to make it worthwhile, for example, the increased threat of regulatory action and the fact that lawsuits against hedge fund managers are rising, both in number and amount. Smaller fund managers in particular, will be more exposed as they may not have the balance sheet strength to deal with a lawsuit or a significant trade error loss. There is also an emerging trend for potential investors to demand PI cover in addition to D&O cover.

It is also surprising that there is not a 100% take up rate for D&O Insurance. Whilst there have been few claims against directors in the past, this looks set to change as tougher enforcement measures come into play: executive and non-executive directors and senior management may face increased personal exposure to regulatory sanctions. Overall, most managers were generally satisfied with their broker. However, it was a different story for those funds that had made an insurance claim. In these cases, half of the respondents were unhappy saying they found the claims process lengthy, with the underwriters’ lawyers very slow in processing the paperwork.

The reality is that hedge fund COOs and CFOs only get to see the quality of the insurance product, claim management and their choice of insurer when they have a claim.