Asia PR News

GEORGE TOWN, Oct. 31 /PRNewswire-AsiaNet/ –

Favorite Vehicle of Japanese Investors Expands
to New Markets, Says Walkers

Walkers, the global offshore law firm of choice for investment managers,
financial organizations, and international law firms, said today that hedge
fund managers are increasing their use of unit trusts in structuring hedge
funds. While these vehicles have been favoured by Japanese investors for years,
fund managers in other markets are now incorporating them into new funds to
attract Asian investors.

"As the number of hedge funds continues to break records, fund managers are
looking for innovative ways to structure funds, and unit trusts are becoming an
increasingly popular option," Ingrid Pierce, head of Walkers’ Commercial Trusts
Group, said. "We are seeing more applications for hedge funds — from use by
pension funds to convergence with private equity and mutual funds. The unit
trust structure is extremely flexible and can be tailored to suit the client’s
demands. The overall increase in the use of unit trusts is indicative of the
maturity of the hedge fund market, which now has a much broader investor base
as Japanese investors becoming increasingly active in global markets. Unit
trusts are a great vehicle to encourage these investors."

According to a recent survey by the Daiwa Institute of Research, almost
two-thirds of Japanese pension funds are investing in hedge funds. Japan saw an
almost 13 percent jump in the number of pension funds using alternative asset
managers over the last year. The Daiwa report stated that Japanese pension fund
managers liked the diversification that hedge funds allowed in their investment
portfolios. Given the appeal of the unit trust for Japanese investors, the use
of these trusts in fund structures signals further growth in this area.
According to analysts, Japanese investors have about $USD 50billion in hedge
fund assets.

"While we continue to see our Japanese clients using unit trusts, we are
also seeing more complex structures. We fully expect this trend to continue,"
Carol Hall, a partner in Walkers’ Hong Kong office, said. "Arrangements such as
the ‘master feeder’ structure, continue to be popular and are a flexible means
of adding on to existing structures to accommodate other investor groups. With
these multi-level funds, it’s critical that investors and trustees are working
with attorneys who understand the issues and ramifications of these types of
structures."

Compared to the numbers in the Cayman Islands, there are only a small group
of administrators in Asia that are prepared to act as trustee in a unit trust
structure because of the attendant fiduciary obligations. In recent years there
have been a number of high profile hedge fund collapses which have highlighted
the concern for service providers who provide trustee services, said Walkers.

"We predict that we will see more changes being requested to unit trust
structures to address the concerns of trustees in particular. It remains to be
seen how the courts will interpret the role of the manager who is party to a
bilateral trust deed under which it assumes obligations that traditionally were
assumed by a trustee. However, it is clear that the safeguards being sought by
trustees and their affiliated administrators are a commercial fact of doing
business using a unit trust structure in Asia," said Ms. Hall.

About Walkers and Walkers SPV
Based in the Cayman Islands with offices in the British Virgin Islands,
Dubai, Hong Kong, Jersey, and London, Walkers offers high-level skills across
the legal spectrum. Walkers was named by HedgeWorld Limited as the top law firm
for hedge funds by total assets of funds and assets of non-U.S. funds, as well
as the 2006 Who’s Who Legal Law Firm of the Year: Cayman Islands, the PLC Which
Lawyer? Yearbook 2006 Leading Cayman Islands Law Firm, The Lawyer’s 2006
Offshore Law Firm of the Year, and one of two firms honored as "Offshore Legal
Team of the Year" by the Society of Trust and Estate Practitioners (STEP) in
2006.

Walkers acts for a wide range of clients including major financial
institutions, investment banks, leading law and accounting firms, major
corporations of all kinds, partnerships, trust companies and other fiduciaries
representing almost every country in the world. The firm’s aim is to provide
clear, concise and practical advice based on an in-depth knowledge of the
legal, regulatory and commercial environment in the Cayman Islands, the BVI,
and Jersey. Walkers is experienced in all types of international and
cross-border transactions and welcomes a close working relationship with
clients and other professional advisers.

Walkers SPV Limited is a licensed trust company and mutual fund
administrator, wholly-owned by Walkers, with a branch office in Tokyo. It
provides experienced and expert management and administration of Special
Purpose Vehicles (SPVs), Directorship and Trustee services to Cayman-domiciled
investment funds, as well as registered office and secretarial services for
many companies and partnerships of all types.

For more information on Walkers or Walkers SPV, visit us on the Web at
http://www.walkersglobal.com or contact us by e-mail at info@walkersglobal.com
To contact Walkers by phone, call our Cayman Islands office at +345-949-0100 or
our Hong Kong office at +852 2284 4566.

SOURCE: Walkers

CONTACT: Melissa Maslar Arnoff of Levick Strategic Communications,
Direct Line: +1-202-973-1336,
Mobile: +1-202-276-0070, or
marnoff@levick.com,
for Walkers

Web site: http://www.walkersglobal.com