News 19 Dec. 2019
Curtis Wins in London for Federal Airports Authority of Nigeria
News 18 Apr. 2016
Curtis gains recognition in new Africa publication
News 26 Feb. 2020
Curtis Secures Comprehensive Victory for the Republic of Kazakhstan’s Committee of Roads
News 24 Jan. 2020
Curtis defeats $400 million investment treaty claim brought against India
Client Alert 07 Apr. 2020
Italy Insight: Care Decree Against COVID-19 (Coronavirus): a Company-Oriented Analysis
Client Alert 03 Apr. 2020
EU Insight: COVID-19 (Coronavirus) – Regulatory Measures and Announcements
Client Alert 26 Mar. 2020
Mexico Insight: COVID-19 (Coronavirus) Legal Implications
News 18 Dec. 2019
Six Curtis Partners Featured in Who's Who Legal - Arbitration 2020
Event 31 Jan. 2020
Partner Antonia Birt Speaks at 5th Annual GAR Live Abu Dhabi
Publications 15 Jan. 2020
Antonia Birt publishes IBA Arbitration Country Guide for the UAE
U.S. Insight: CARES Act Provisions for Small Businesses and Individuals
Client Alert 27 Mar. 2020
U.S. Insight: Data Security and Protection in the New Work-From-Home Regime During Coronavirus/COVID-19
News 27 Apr. 2016
Funds Partner Marc V. Kramer and Frankfurt office funds associate Agata Zdunek were quoted extensively by Institutional Money, a leading publication for institutional investors in the D-A-CH region (Germany-Austria-Switzerland), in an article titled “Hunt for Index Huggers” published very recently in edition 1/2016.
Active Share is a measure of the percentage of stock holdings in a fund manager's portfolio that differ from the fund’s benchmark index and can be useful in identifying so called "closet indexers" (“index huggers”), i.e. managers who claim to be active but whose portfolios are very similar to the benchmark portfolio. Identifying closet indexers is important because active management fees can be a significant hurdle to outperforming the index for anyone holding a portfolio similar to its benchmark.
With ESMA, the EU’s Securities and Markets Authority, steadily increasing its supervisory work on potential closet index tracking and German securities regulator BaFin even going beyond ESMA by recently launching special inspections with mutual fund managers in Germany, Mr Kramer describes possible legal consequences from detected closet indexing such as, inter alia, administrative fines by BaFin and prospectus liability towards investors.
Marc Kramer points out, “Regulators in the EU and in Germany have started to define Active Share and to determine criteria for identifying closet indexing with no indications available yet of what the outcome will be.” he notes that fund managers in Germany appear pretty aware by now and finally have put Active Share on top of their internal agendas. He further comments: “Interestingly, in Europe - primarily in the Nordic countries and in Poland but now also in Germany - closet indexing seems to be a bigger issue than in the United States”. According to Mrs Zdunek, any deviation from the investment program and strategy described in the prospectus of a mutual fund may make its manager vulnerable as to closet indexing.
Marc V. Kramer
Agata J. Zdunek