Alt Valuations’ Post

Securities and Exchange Board of India (SEBI) turns to the public for the enhancement of AIFs valuation framework. The proposal rational is simple: To seek public opinion on AIFs valuation framework in hopes of guiding the adoption of a simple, consistent and standardized approach for valuing investment portfolios. "The key proposals include (a) the applicability of valuation norms under SEBI (Mutual Fund) Regulations to compute the valuation of AIFs’ investment portfolios, (b) the eligibility criteria for independent valuers to be appointed by AIFs and (c) extending the timeline to report valuation of investments to performance benchmarking agencies to 7 months." Read Taxmann's full blog here: https://lnkd.in/eFqNvRV7

Key consultation, have your voice heard! Only 22 plain English questions

As part of the ongoing implementing work following the AIFMD review, ESMA launched a consultation on loan-originating alternative investment funds. It relates to the requirements that these funds have to comply with in order to have an open-ended structure (derogating from the general rule that loan-originating funds have to be closed-ended). The consultation paper is available below and we're looking forward for receiving input by 12 March next year. https://lnkd.in/eUyK6zjR

On September 19, the Canadian Securities Administrators (CSA) - Autorités canadiennes en valeurs mobilières (ACVM) published for comment a series of proposed amendments aimed at modernizing the continuous disclosure regime for investment funds. The proposals are designed, among other things, to provide investors with more legible and valuable disclosure.   The proposed amendments contemplate requiring some new information in the Fund Report as compared to the actual MRFP including a brief summary of the investment fund manager's assessment of the investment fund’s success in respect of achieving its investment objectives, and using its investment strategies to achieve those investment objectives, during the period covered by the report.   In this context, we have included instructions that specifically assist investment funds that have environmental, social and governance (ESG)-related aspects to their investment objectives and/or investment strategies, in providing this disclosure. For example, we highlight that it is appropriate to include an analysis of the following elements that apply:   ➡️ key quantitative metrics used by the investment fund manager to assess whether the investment fund has satisfied the stated ESG-related aspects of the investment objectives of the investment fund;   ➡️ key quantitative metrics used by the investment fund manager to assess whether the investment fund has satisfied the stated ESG-related criteria for the investment strategies of the investment fund;   ➡️ how the investment fund’s use of proxy voting, shareholder engagement and issuer engagement, as applicable, as principal investment strategies satisfied the stated ESG-related aspects of the investment fund’s investment objectives or the stated ESGrelated criteria for the investment strategies; and   ➡️how significant changes made to the composition of the investment portfolio of the investment fund align with the stated ESG-related aspects of the investment fund’s investment objectives or the stated ESG-related criteria for the investment strategies.   🔗 The CSA Consultation Notice is available at the following link: https://lnkd.in/eFJbrDQY    🗓️ The consultation ends on January 17, 2025.   🌎📊

We are excited to announce that the Aoris International Fund has been upgraded to a Recommended rating by Lonsec. Lonsec based the rating on a number of key attributes, including the credentials and experience of the investment team, impressive track record and robust nature of the business. The Recommended rating is a testament to our disciplined investment processes and the Fund’s ability to deliver on its investment objectives. Over five years to March 2024, the Fund’s Class A delivered a return of 17.0% p.a. (after fees), outperforming the benchmark by 4.1% p.a. Aoris has grown to more than $1.3b in Funds Under Management. Well done to the entire team. ----------------------------------------------------------------------------------- This information has been prepared and issued by Aoris Investment Management Pty Ltd ABN 11 621 586 552 / AFSL 507281 (Aoris) as the investment manager of the Aoris International Fund (Fund). The Trust Company (RE Services) Limited ABN 45 003 278 831 is the responsible entity and the issuer of units in the Fund. For general advice only and does not take into account the objectives, financial situation or needs of investors. Read the PDS and Target Market Determination (TMD) available at https://lnkd.in/gMCKKEVU to see if the product is right for you. All investments contain risk and may lose value https://lnkd.in/g3pSx9U

Management Reports of Fund Performance ("MRFPs") were launched decades ago by Canadian securities regulators to ensure Canadian investors would receive timely and important information about the funds they were invested in. The importance of providing investors with that information is as – or even more – important today. Ext. Marketing has been at the forefront of ongoing investor communications for as long as MRFPs have been around, and we continue to extol the value of regular communications with investors. If the information being provided in regulatory documents is going to be reduced, we encourage all asset managers to ramp up their more investment-focused marketing on a quarterly – or even monthly - basis. Please reach out to me directly (rheft@ext-marketing.com) to discuss how Ext. Marketing can help you produce timely investor communications more efficiently.

Valuation framework for Alternative Investment Funds One of the key aspects of SEBI (Alternative Investment Funds) Regulations is the standardization of the approach to carry out valuation of investment portfolios. AIFs are required to carry out the valuation of their investments in the manner specified by SEBI from time to time. In the case of securities for which valuation norms have already been prescribed under SEBI (Mutual Funds) Regulations, 1996 (‘MF Regulations’), the valuation shall be carried out as per the norms prescribed under the MF Regulations. For securities that are not covered under the MF Regulations, valuation guidelines endorsed by any SEBI recognized AIF industry association, which represents at least 33% of the number of SEBI registered AIFs, shall be taken into account. The guidelines must be endorsed after taking into account recommendations of Alternative Investment Policy Advisory Committee of SEBI. Investment Managers of AIFs are also required to disclose in the Private Placement Memorandum (PPM), the details of the valuation methodology and approach adopted under the relevant guidelines for each asset class of the scheme of the AIF. To ensure the integrity of these valuation processes, investment managers bear significant responsibilities. Responsibilities of Investment managers Include: 1.    To ensure that the independent valuer computes and carries out the valuation of the investments of the schemes of the AIFs in the manner as specified by the board. 2.    To deviate from the established valuation policies and procedures only in exceptional circumstances when it is determined that such deviation is necessary to achieve a fair and appropriate valuation. The Investment Manager shall provide rationale for such deviation. 3.    To inform the investors of reasons/ factors for deviation of more than 20% between two consecutive valuations or deviations of more than 33% in a financial year. 4.    To comply with the relevant process in case of any material change in the valuation methodology and approach for the valuation of investments of the scheme of AIF. The AIF must appoint an independent valuer with at least three years of experience in the valuation of unlisted securities. The independent valuer shall not be an associate of the manager, sponsor, or trustee of the AIF. The independent valuer shall comply with the criteria specified by SEBI. The Investment Manager of AIF shall submit a report on compliance with the provisions of the circular on the SEBI Intermediary Portal in the format as specified. Investment managers must adhere to the valuation standards and leverage independent expertise to safeguard investor interests. ANB Legal #AIFs #Valuation #SEBI

Certification requirement for key investment team of manager of AIF.   In terms of Regulation 4(g)(i)of SEBI (Alternative Investment Funds) Regulations,2012 (“AIF Regulations”), the key investment team of the Manager of an Alternative Investment Fund(AIF)shall have at least one key personnel  with relevant certification asmay be specified by SEBIfrom time to time, asan eligibility criterionfor obtaining certification of registration as an AIF. 

The EFAMA Fact Book has just been released, offering valuable insights into the performance of the European investment management industry in 2023. This year's edition reveals a gradual recovery from the economic instability caused by the 2022 invasion of Ukraine. Available for free on EFAMA’s website, the Fact Book provides an in-depth analysis of industry trends over the past decade, with a particular focus on the past year. Within this report, EFAMA has outlined policy priorities for the asset management industry for the next five years. The report also includes a detailed analysis of various European markets, including Malta. The Malta Country Report highlights key trends in the Maltese fund industry from 2019 to 2023. It reveals that home-domiciled UCITS and AIFs experienced fluctuations, with net assets stabilizing at EUR 19.8 billion in 2023. Despite modest growth in UCITS assets, net outflows were common, particularly in bond funds. Non-UCITS funds faced similar challenges, although equity non-UCITS funds saw strong inflows in 2023. The report also showed how regulatory developments in Malta focused on enhancing liquidity management, delegation practices, and supervisory reporting. The MFSA emphasized transparency in fee disclosures and investor protection, exemplified by the launch of the NPIF in early 2024. Updates to the MiFID II, CSDR, EMIR, and ELTIF frameworks were made to align with EU standards and enhance investor protection. Additionally, sustainable finance, digital finance, and cybersecurity were prioritized. For a closer look at the Malta Country Report and the overall Fact Book, click the following link: https://lnkd.in/dDm6-BYE

🚀 SEBI Introduces Specialized Investment Fund (SIF): A New Asset Class for Advanced Strategies 💡 SEBI has unveiled Specialized Investment Funds (SIF) as a new asset class, paving the way for mutual funds to launch advanced strategies. This framework introduces enhanced opportunities while emphasizing transparency, investor protection, and risk control. Here’s what you need to know: 💡 Key Highlights of SIF 1️⃣ Flexible Structures: SIFs can operate as open-ended, closed-ended, or interval strategies, offering varied subscription and redemption frequencies. 2️⃣ Minimum Investment: Investors must contribute at least ₹10 lakh, except for accredited investors. 3️⃣ Risk Controls: Exposure to single issuers, companies, and sectors is capped to maintain portfolio balance. For example: Debt Instruments: Maximum 20% of NAV per issuer (up to 25% with prior approvals). Equity Instruments: No strategy can exceed 10% of NAV in a single company. 4️⃣ Distinct Identity: SIFs must have separate branding and clear disclosures to highlight their high-risk nature. ✨ Launching and Compliance SIF strategies will follow procedures for mutual fund schemes under Regulation 28, with fees adhering to Regulation 52. Fund managers must hold relevant NISM certifications, ensuring professional oversight. 💡 Key Restrictions: REITs/InvITs: Total investments capped at 20% of NAV, with a 10% issuer limit. Ownership Limits: SIFs cannot own more than 15% of a company’s paid-up capital with voting rights. 📄 Transparency Focus: SEBI mandates detailed disclosures, including risk factors and portfolio updates, ensuring informed decision-making for investors. 📩 P.S. The Specialized Investment Fund framework is a significant step toward innovation in mutual funds. If you’d like to explore its potential for your investment strategies, let’s connect! #SEBI #MutualFunds #AdvancedStrategies #InvestorProtection #FinancialInnovation #SpecializedInvestmentFunds