Issue: A major international bank sought to create a Bermuda reinsurance company as part of its plan to outsource its proprietary trading desk. The assets of the reinsurer were to be managed by alternative investment managers. Unfortunately, with just two weeks remaining until the plan was to go live, allocations had not yet been finalized, contract negotiations had bogged down, and no documents had been executed to allow the various hedge fund managers and commodity trading advisors to trade. At the same time, the bank’s internal counsel began objecting to some terms and conditions. Finally, the senior manager in charge of the project needed to be out of the country for the week before activation.

Sinclair's Solution: Sinclair was brought in to manage the project. We literally moved into the bank, set up a “war room” to run the process, and recruited Sinclair affiliate Wolfehaus, a specialty consultant with deep broker dealer, bank, and commodity expertise to join us. To resolve the bank’s legal concerns, we convinced the commodity trading advisors to create new commodity pools, thereby limiting the bank’s liability.

Result: The investment program went live as scheduled, with the vast majority of assets deployed. One hedge fund advisor, who sought to take advantage of tight deadlines to change its terms and conditions, was not included in the program at Sinclair’s suggestion. Some commodity programs were delayed, but only by days.

Issue: In preparation for the IPO, the government desired to benchmark the company against international best practices in corporate governance.

Sinclair's Solution: After a thorough document review, Sinclair went on site. In conjunction with our affiliate, Davis Global Advisors, Sinclair conducted intense due diligence with both management and the Board, as well as outside lawyers, the local stock exchange, and other advisors, in order to develop our written report, including analyses and conclusions that answered the government’s inquiries.

Result: Our written report was accepted. The company is now fully privatized, with a market capitalization of nearly $12 billion.

Issue: The firm was experiencing systemic underperformance following a change in
senior management.

Sinclair's Solution: Sinclair worked with new management to focus on improving the clarity of communication and flow of information among investment teams and between team members. We identified weaknesses and corrected them, and emphasized strengths and solidified them. Our review and recommendations covered all aspects of the firm’s asset management, including, as examples, what portfolio optimizer to use, how compensation was calculated, when portfolio management meetings were scheduled.

Result: Performance has improved significantly. The company is now repositioning itself as a nimble, alpha-oriented investor – consistent with new management’s investment philosophy — rather than as a traditional, benchmark-focused firm.

Issue: The fund had reached a point in its life cycle when it wanted to attract institutional capital, but was unable to do so.

Sinclair's Solution: Sinclair performed a thorough top-to-bottom due diligence, which the manager approached in open-kimono fashion. During the process we examined everything from investment process to trading methods, legal structures and documentation, marketing channels, and potentially conflicting desires of the three partners.

Result: The due diligence yielded 32 separate, specific, actionable recommendations. The partners reviewed the report and agreed to implement 28 of them. Assets are up more than 50% in the following year.

Issue: This hedge fund—owned by a merchant bank and seeded by one of its important clients/strategic partners—was experiencing volatile and sub-standard performance.

Sinclair's Solution: At the request of the merchant bank, and in conjunction with the portfolio manager, Sinclair wrote risk standards for the fund. A year later, volatility had been dampened and returns were up, but the history and circumstance of the fund made asset gathering difficult. The bank again called upon Sinclair, this time to evaluate the commercial viability of the fund.

Result: Despite the improvement in performance, Sinclair recommended closing the fund and returning the capital to the strategic partner, arguing that a long-term, permanent fix was possible, but not the most efficient use of the seed capital. The bank closed the fund.

Issue: A major holder of defaulted WorldCom debt wanted to influence the bankruptcy proceedings, but did not want to have its trading restricted.

Sinclair's Solution: After instituting a trading wall, Sinclair served as a member of the official creditor’s committee. We focused on big picture issues, such as: Was the company in the right businesses? Did it have the right board and management? How could such a complex case be resolved quickly, so as to preserve value?

Result: By positioning Sinclair as the corporate governance expert for the committee, we were able to influence the process. Sinclair served on the CEO selection committee, and was a negotiator of the inter-creditor settlement that enabled WorldCom to emerge from bankruptcy in a shortened time frame.