NYSSPCA’s Investment Management Committee

NYSSPCA’s Investment Management Committee
A Resource for Industry Practitioners

By Lunel Milien, NYSSCPA Industry Project Manager

Individuals in the investment management arena may well find the Society’s Investment Management Committee to be a resourceful tool to help them stay abreast of new developments, regulations and policy that affect the industry on an operational and financial basis.

The Investment Management Committee, chaired by Thomas Gengler, meets on a monthly basis to discuss the accounting and operational implications for originators, intermediaries, and end users of new and existing financial products, including debt, equity and derivative financial instruments.

At recent meetings, members discussed the industry application of a certain financial instrument and the implication of the instrument to the financial statement and operational aspects of an organization. There was also discussion and debate on the application and reporting of FAS 133 regarding when a derivative instrument should be reported in earnings or as an Other Comprehensive Income item.

What makes the meetings and discussions so stimulating is the fact that the members of this committee deal with accounting issues, regulations and applications on a daily basis. The committee serves as a forum for professionals in the investment management field to interact and learn from each other.

Committee Meetings and Expert Speakers

At the committee’s Nov. 7, 2006, meeting, Leon M. Metzger, a past chair and current member of the Investment Management Committee, gave an overview and case study of the fall of the Amaranth Hedge Fund. Prior to his involvement in academia and consulting as a lecturer in finance at the Yale School of Management, Metzger was associated with Paloma Partners Management Company for 18 years, most recently as its vice chairman and chief administrative officer.

The case study Metzger presented was the first of a two-part series discussing a descriptive timeline of the significant events that took place prior to the breakdown and what led to the eventual downfall of the $6 billion hedge fund Amaranth.

Metzger covered the investment pool, classification and allocation of Amaranth, the meaning of multi-strategy, and whether or not Amaranth should have been classified as a multi-strategy hedge fund under the definition of the term. The case study also covered the crisis-management style of Amaranth’s top brass.

At the Dec. 5, 2006, meeting of the committee, International Fund Services representative Julie Meyer, a managing director of client services in New York, gave a presentation centered on the accounting administrative service that IFS provides to hedge funds. There was also a discussion of the constant operational and financial growth evolution and challenges the investment class consistently faces. The presentation elaborated on the current trends in industry practices, and potential regulations being proposed that will affect how hedge fund businesses operate.

The Investment Management Committee is a forum to share and discuss industry trends, techniques and practices that affect industry practitioners. The committee is a great opportunity for members to gain insight and share their experiences with industry practitioners and CPAs who have years of experience and service in their respective fields.

Upcoming committee meetings will be held on Feb. 6, April 3, May 1 and June 6. If you would like to attend any of these meetings in person or via teleconference, contact Lunel Milien at 212-719-8452 or lmilien@nysscpa.org. To learn more about this or other Society statewide committees or to join a committee, contact Nellie Gomez, NYSSCPA Senior Manager, Committee Services, at 212-719-8358 or ngomez@nysscpa.org. Committee information is also available online at the Society’s Web site at www.nysscpa.org.

Lunel Milien can be reached at lmilien@nysscpa.org.