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The Maseco Asset Management Limited website is intended for use only by knowledgeable and experienced investors who meet certain criteria.

Maseco Asset Management Limited (MAM), a limited company incorporated in the British Virgin Islands under number 1893498, approved as an investment manager by the British Virgin Islands Financial Services Commission.  Certificate No. IBR/AIM/16/0132.

A “knowledgeable and experienced” investor could be an institutional investor, a professional investor or in the case of a retail investor an investor with sufficient knowledge and investment experience.

UK Resident Investors – Certified High Net-worth Investor Statement

You have throughout the financial year immediately preceding the date below had an annual income of £100,000 or more or held throughout the financial year immediately preceding the date below, net assets to the value of £250,000 or more.

Net assets for these purposes do not include the property which is your primary residence or any money raised through a loan secured on that property; any rights of yours under a qualifying contract of insurance; or any benefits (in the form of pensions or otherwise) which are payable on the termination of your service or on your death or retirement and to which you (or your dependants are), or may be, entitled.

You accept that the investments to which the promotions will relate may expose you to a significant risk of losing all of the money or other property invested.  That you are aware that it is open to you to seek advice from an authorised person who specialises in advising on non-mainstream pooled investments.






US Resident Investor – Accredited Investor Statement

As a US citizen you are an Accredited Investor as one of the following applies, you either have individual Income in excess of $200,000 in each of the last two calendar years or joint Income with a spouse in excess of $300,000 in each of the last two calendar years and reasonably expects to attain levels of Income this year at least equal to these amounts.[1] Or you have, and at the time of any purchase of securities of the Investment will have, an individual Net Worth, or the spouse and the investor currently has, and at the time of any purchase of securities of the Investment will have, a combined Net Worth in excess of $1,000,000.[2]

You accept that the investments to which the promotions will relate may expose you to a significant risk of losing all of the money or other property invested.  You are aware that it is open to you to seek independent advice.

Risk Warning

You should refer to the Prospectus, an Adviser and a Tax Specialist in each case before making any decision to invest in either of MAM’s Alternative Credit Funds.

Past performance is not an indicator of future results.  Currency fluctuations may increase or decrease the returns of any investment.  The value of investments can fall as well as rise; you may not get back what you invest.  The funds have limited liquidity and so you should expect not always to receive back your capital in a timely manner, during this time the fund value may fall as well as rise.

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By accepting these statements you confirm you have read, understood and you meet the conditions of the relevant category of investor.

1 Income means adjusted gross income, as reported for federal income tax purposes, increased by the following amounts: (i) the amount of any tax exempt interest income received; (ii) the amount of losses claimed as a limited partner in a limited partnership; (iii) any deduction claimed for depletion; (iv) amounts contributed to an IRA or Keogh retirement plan; (v) alimony paid; and (vi) any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income pursuant to the provisions of Section 1202 of the Internal Revenue Code.

2 Net Worth is the amount by which your total assets at fair market value exceed your total liabilities, with the following adjustments:

(i) the estimated fair market value of your primary residence is excluded from your total assets; (ii) the amount of any indebtedness secured by your primary residence up to the fair market value of such residence is not treated as a liability; (iii) the amount of any indebtedness secured by your primary residence that exceeds the fair market value of your primary residence is treated as a liability; and (iv) the amount of any debt secured by your primary residence incurred during the 60 days immediately preceding your purchase of any securities of the Company is treated as a liability (even if the estimated fair market value of your primary residence exceeds the aggregate amount of indebtedness secured by such primary residence), unless such debt resulted from the purchase of your primary residence during such 60 day period.

Takeshi Koyama
Takeshi Koyama

takeshi.koyama@altinvr.com

Back to opinions
September 7, 2016
Takeshi Koyama

The potential butterfly effect of upcoming Money Market Fund reforms

In two months from now, on October 14, the Money Market Fund Reform Rules are going to be implemented in the US: institutional prime money market funds will be required to move away from the fixed $1 share price and adopt a floating NAV.

The new rules were adopted by the SEC in July 2014, after much debate, in response to calls to improve the transparency and resilience of money market funds after the 2008 financial crisis.

From October onwards, the NAV of institutional money market funds could fall below $1 if the credit quality of their portfolio deteriorates. In order to prevent a run on the fund when the NAV breaks to buck, the new rules allow a fund to impose a 1% redemption fee if weekly liquid assets fall below 10%, 2% below 30%, or impose a redemption gate. Liquid assets are defined as cash, US Treasuries, and paper with less than a week to maturity.

Retail money market funds and government money market funds are exempt from these new rules and continue to transact at a fixed $1 share price.

The industry has had two years to prepare and ‘regulatory guidance’ telegraphed well ahead of time. Some of the largest money market managers have been converting their institutional prime money market funds into government money market funds, invested exclusively in US government securities. More than $350bn has already been converted. As the October implementation date approaches, institutional and corporate investors are expected to further redeem from prime money market funds and invest in government funds. No one knows exactly how much. In anticipation, the money market funds have been increasing their liquidity buffer, by circa $25bio every month. Analysts estimate that 50% of their AUM is already in assets with maturity of a week or less, and the buffer is expected to increase to 70% by October or $550bn. Observers therefore expect the money market funds to seamlessly manage this massive flows of funds.

The borrowers funded by the prime money market funds are mainly non-American banks looking for US dollars. Until now, the short term unsecured funding from the money market funds has been a cheap source of US dollars for foreign banks without US deposits. With circa $900bn of money market funding going away, the banks have a number of options: pay higher rates to continue funding in the much narrower prime money market, to use the cross currency swap market to convert home based deposits into US dollars, or as a backstop, to use the FX swap lines provided by the central banks. There also have secured or longer term funding options of course, but more onerous. For the immediate transition period, the central banks stand ready to provide liquidity; and no one anticipates a liquidity disruption. On the long run, the changes will affect the US dollar business model of foreign banks, how they position themselves in terms of pricing and risk level.

From an alternative credit view point, these changes are occurring at the opposite end of the spectrum in the high grade liquid markets, for the banks to fund US government securities holdings and their traditional corporate lending business.  At face value these changes have nothing to do with the high yield, niche segments of alternative credit. However the sheer size involved in this money market reform makes it worth noting. If the flap of a butterfly can change the weather on the other side of the ocean, then a $2.7 trillion dollar whale, even if it flips very carefully, could cause some ripples.