Aksia

Last updated

Aksia LLC
Company type Private
Industry Financial services
FoundedOctober 2006;17 years ago (2006-10)
FounderJim Vos
Headquarters 599 Lexington Avenue, New York City, U.S.
Key people
Jim Vos (CEO)
Products
Total assets US$300 billion(under advisement ) (2023)
Number of employees
460 (2024)
Website aksia.com
Footnotes /references
[1]

Aksia is an American alternative investment management and advisory firm headquartered in New York City. The company provides alternative investments to institutional investors.

Contents

Aksia's main offices outside the U.S. are in London and Tokyo.

Background

Aksia was founded in October 2006 by Jim Vos who was previously Head of the Fund of funds group at Credit Suisse and five other former executives from the same bank. [2]

The firm first became notable for advising clients to not invest with the feeder funds of Madoff Investment Securities before the Madoff investment scandal was unveiled as a ponzi scheme in late 2008. In a report written in August 2007, Aksia stated that Madoff Investment Securities had numerous red flags. Initially Aksia noted that its split-strike conversion strategy could not be replicated by other firms in producing the returns and that the firm became big because it didn't charge fees but instead made money on trading commissions. After speaking with Madoff Investment Securities traders and Bernard Madoff himself, Aksia learnt that the balance sheet for proprietary trading at the firm was not big enough to pay for the returns of the feeder funds. In addition the proprietary trading business was barely profitable and family members who worked at the firm was secretive. Aksia also hired a private investigator to look into the auditing firm working for Madoff Investment Securities, Friehling & Horowitz.When Aksia tried to call the accountants, one hung up immediately while the other was a 78-year-old man living in Florida. As a result, in its report Aksia said Madoff's fund was not audited and stated four possible scenarios from Madoff's work being completely above board to it being a fraud. [2] [3] [4]

Despite the large demand from institutional investors for advice, there were only a select handful of specialists who could fulfill such needs. Due to Aksia's increased reputation for thorough due diligence and research, its employees were high sought after with some being poached by rival firms which raised concerns about Aksia's turnover. Compared to its older peers, Aksia had only been in the business for several years. In January 2010, Aksia sued two former employees for $40 million. Aksia claimed the two took confidential and proprietary information from it to their new firm, Albourne Partners. It also claimed they contacted Aksia clients and told them to move their business to Albourne. In March 2010, Aksia amended the lawsuit to increase the scope to include Albourne and its executives. In June 2010, Aksia and Albourne agreed to a settlement one day before the trial began. [2] [5] [6] [7]

In January 2020, Aksia announced that it would acquire TorreyCove Capital Partners, a San Diego–based advisory firm specializing in private equity and real assets. [8] In October 2020, Aksia announced it would acquire Alignium LLC, a Chicago-based consulting firm specializing in real estate. [9] Aksia has stated both acquisitions were done to increase its asset class coverage and that it would take steps to address any potential conflicts of interest. [10]

On April 8, 2020, Aksia send out a letter to its clients stating that they should not take advantage of the Paycheck Protection Program (PPP). It stated PPP loans should not be going to alternative asset managers whose management fees are not significantly impacted by the COVID-19 pandemic. Managers who take advantage of the program would show not just poor moral judgment and hurt the reputation of the industry but also crowd out struggling workers and businesses severely impacted by COVID-19. [11]

Notable cases

In October 2014, Aksia downgraded its rating on then-hedge fund BlueCrest Capital Management to uninvestable and advised its clients to pull out their money due to a lack of transparency. This came after BlueCrest received attention in the media earlier in the year due to Albourne Partners downgrading it stating it had not provided sufficient information on its proprietary trading fund, BlueCrest Staff Managed Account (BSMA) would could have conflict of interest issues. In December 2020, the U.S. Securities and Exchange Commission announced that BlueCrest had agreed to pay $170 million to settle charges arising from inadequate disclosures, material misstatements, and misleading omissions concerning its transfer of top traders from its flagship client fund, BlueCrest Capital International (BCI) to BSMA and replacement of those traders with an underperforming algorithm. [12] [13]

In October 2020, Aksia urged its clients not to provide any more money to Apollo Global Management amid lingering question over co-founder Leon Black’s relationship with Jeffrey Epstein. It stated it was prudent to delay any new commitments until the investigation of the relationship by Dechert was completed and if there was indeed a relationship, investors that recently committed new capital an Apollo fund could be subject to intense scrutiny. In January 2021, Dechert released a report stating that Black had paid Epstein $158 million for financial advice from 2012 through 2017 which lead to Black resigning from his position as Apollo's CEO a few months later. [14] [15]

In October 2023 Aksia rescinded its approval for Brookfield Corporation's special situations fund after two top executives left. [16]

Related Research Articles

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A pension fund, also known as a superannuation fund in some countries, is any program, fund, or scheme which provides retirement income.

<span class="mw-page-title-main">Investment banking</span> Type of financial services company

Investment banking is an advisory-based financial service for institutional investors, corporations, governments, and similar clients. Traditionally associated with corporate finance, such a bank might assist in raising financial capital by underwriting or acting as the client's agent in the issuance of debt or equity securities. An investment bank may also assist companies involved in mergers and acquisitions (M&A) and provide ancillary services such as market making, trading of derivatives and equity securities, FICC services or research. Most investment banks maintain prime brokerage and asset management departments in conjunction with their investment research businesses. As an industry, it is broken up into the Bulge Bracket, Middle Market, and boutique market.

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An institutional investor is an entity that pools money to purchase securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, government-linked companies, insurers, pension funds, sovereign wealth funds, charities, hedge funds, real estate investment trusts, investment advisors, endowments, and mutual funds. Operating companies which invest excess capital in these types of assets may also be included in the term. Activist institutional investors may also influence corporate governance by exercising voting rights in their investments. In 2019, the world's top 500 asset managers collectively managed $104.4 trillion in Assets under Management (AuM).

A "fund of funds" (FOF) is an investment strategy of holding a portfolio of other investment funds rather than investing directly in stocks, bonds or other securities. This type of investing is often referred to as multi-manager investment. A fund of funds may be "fettered", meaning that it invests only in funds managed by the same investment company, or "unfettered", meaning that it can invest in external funds run by other managers.

In finance, assets under management (AUM), sometimes called fund under management, measures the total market value of all the financial assets which an individual or financial institution—such as a mutual fund, venture capital firm, or depository institution—or a decentralized network protocol controls, typically on behalf of a client. Funds may be managed for clients, platform users, or solely for themselves, such as in the case of a financial institution which has mutual funds or holds its own venture capital. The definition and formula for calculating AUM may differ from one entity to another.

<span class="mw-page-title-main">Man Group</span> British investment management business

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<span class="mw-page-title-main">Alternative investment</span> Investments other than stocks, bonds and cash

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<span class="mw-page-title-main">Madoff investment scandal</span> Investment scandal discovered in 2008

The Madoff investment scandal was a major case of stock and securities fraud discovered in late 2008. In December of that year, Bernie Madoff, the former Nasdaq chairman and founder of the Wall Street firm Bernard L. Madoff Investment Securities LLC, admitted that the wealth management arm of his business was an elaborate multi-billion-dollar Ponzi scheme.

<span class="mw-page-title-main">Participants in the Madoff investment scandal</span>

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References

  1. ↑ "Form ADV" (PDF). SEC.
  2. 1 2 3 Donde, Anastasia (March 1, 2010). "Aksia's Jim Vos: "We don't simplify things"". Institutional Investor. Retrieved January 28, 2024.
  3. ↑ McElhaney, Alicia (April 16, 2021). ""There Was No Money Machine That Could Pay These Returns."". Institutional Investor. Retrieved January 28, 2024.
  4. ↑ "Red flags on Ponzi scheme". The Sydney Morning Herald. December 12, 2008. Retrieved January 28, 2024.
  5. ↑ Strasburg, Jenny (December 21, 2009). "Consultancy's Exits Ripple Through Pension Funds". Wall Street Journal.
  6. ↑ Williamson, Christine (April 19, 2010). "Hedge fund consultants face off". Pensions & Investments.
  7. ↑ Williamson, Christine (June 1, 2010). "Aksia, Albourne settle trade-secrets suit". Pensions & Investments.
  8. ↑ Whyte, Amy (January 8, 2020). "Consulting M&A Hits Alternatives With Aksia's TorreyCove Acquisition". Institutional Investor. Retrieved January 28, 2024.
  9. ↑ Singh, Preeti (October 2, 2020). "Aksia Picks Up Valuable Clients and Assets With Alignium Buy". Wall Street Journal.
  10. ↑ Jacobius, Arleen (November 30, 2020). "Aksia takes care to avoid conflicts with acquisition". Pensions & Investments.
  11. ↑ Chung, Juliet (April 9, 2020). "Hedge Funds and Private-Equity Firms Given Warning Over Small-Business Loan Program". Wall Street Journal.
  12. ↑ Fortado, Lindsay (October 31, 2014). "BlueCrest Downgraded as Aksia Tells Clients to Pull Money". Bloomberg News. Retrieved January 28, 2024.
  13. ↑ Michaels, Dave (December 8, 2020). "BlueCrest Capital Management to Pay $170 Million to Settle SEC Claims". Wall Street Journal.
  14. ↑ Tan, Gillian (October 23, 2020). "Apollo Hit Again as Aksia Tells Clients to Delay Investment". Bloomberg News. Retrieved January 28, 2024.
  15. ↑ Mangan, Dan (January 25, 2021). "Apollo Global CEO Leon Black paid sex predator Jeffrey Epstein $158 million for financial advice after conviction". CNBC. Retrieved January 28, 2024.
  16. ↑ Odeh, Layan (October 30, 2023). "Brookfield Fund Loses Consultant's Approval After Leaders Exit". Bloomberg News. Retrieved January 28, 2024.
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