SEC Company Response from AIG Strategic Hedge Fund of Funds (CIK 0001289827) — Mar 14, 2005
AIG Strategic Hedge Fund of Funds (CIK 0001289827)
Date: March 14, 2005 · CIK: 0001289827 · Accession: 0000943663-05-000179
AI Filing Summary & Sentiment
File numbers found in text: 811-21590
Referenced dates: February 1, 2005
Letter
VIA EDGAR (CORRESPONDENCE) Division of Investment Management U.S. Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Re: AIG Strategic Hedge Fund of Funds ("Fund") (File No. 811-21590)
Dear Ms. Delano:
In response to your letter dated February 1, 2005 to Robert Disclolo, President and Principal Executive Officer of the Fund, we wish to provide you with greater detail regarding the reasons we requested an extension of time to file the Fund's Form N-CSR (as requested on Form 12b-25), as well as the reasons for the delay in the transmittal of the Fund's semi-annual report to shareholders. At the outset, we also want to take the opportunity to assure you that we understand and appreciate the importance of filing Fund reports (and other required filings) with Securities and Exchange Commission ("Commission) on a timely basis, as well as providing Fund shareholders with reports (and other information) on a timely basis. As a result, in response to these recent delays, we will be implementing additional formalized procedures to ensure that future Fund reports will be filed with the Commission, or transmitted to Fund shareholders, on a timely basis.
Comments to Notification of Late Filing on Form 12b-25
With regard to your specific review of our Notification of Late Filing on Form 12b-25 filed on December 9, 2004 relating to the Fund's Form N-CSR for the fiscal period ended September 30, 2004, you commented that "[w]e have evaluated your response to Part III of the Form and have found your reasons for the extension of time, or lack thereof, to be insufficient." As a result, you note that you do "not consider the Registrant's Form N-CSR to have been filed timely." In addition, you noted that the Fund failed to mail its semi-annual report for the period ended September 30, 2004 to the Fund's shareholders within 60 days after the close of the period.
As discussed with you on February 16, 2005, we wish to provide you with greater detail regarding the reasons for the delay in filing of the Form N-CSR and the transmittal to shareholders of the semi-annual report. In addition, we wish to request that the Division of Investment Management reconsider its initial decision regarding the timeliness of the Fund's filing of the Form N-CSR. If necessary, we would be prepared to amend our Form 12b-25 in order to provide greater detail (as discussed herein) regarding the reasons for the delay.
As you discussed with Philip J. Dunne, Principal Financial Officer of the Fund on January 28, 2005, the Fund commenced operations on August 1, 2004 and the Form N-CSR only covered the two-month stub period from commencement of operations through September 30, 2004, the end of the Fund's semi-annual period. As you discussed with Mr. Dunne, since the Fund had just commenced operations, management of the Fund determined, in an abundance of caution, that the Fund and its shareholders would be best served by delaying the filing of the Form N-CSR for several days in order to have additional time to review the Fund's first set of financial statements and to ensure that the Fund's newly adopted Disclosure Controls and Procedures were being properly implemented prior to the filing. As a result, Fund management determined to file the Form 12b-25 in order to request an extension of time to prepare and file its Form N-CSR. In this regard, we wish to emphasize the fact that the delay was not due to any concerns or disagreements relating to the accounting underlying the financial statements, or due to any problems discovered while carrying out the Disclosure Controls and Procedures. Instead, the delay was simply due to a judgment on behalf of Fund management that the delay would provide the Fund with more time to ensure that the newly adopted Disclosure Controls and Procedures were being properly implemented and that the Form N-CSR was completely accurate.
Transmittal of Semi-Annual Reports to Shareholders
With regard to the delayed mailing of the semi-annual reports to shareholders, as you discussed with Mr. Dunne on February 1, 2005, this was due to a miscommunication between the Fund's service providers. While management of the Fund believed that the mailing of the semi-annual report had been sent to the Fund's sole shareholder by the Fund's sub-administrator, PFPC, Inc., we were later informed that the mailing had not occurred. Upon discovery, we notified our sub-administrator that the mailing had not been made and on February 1, 2005, the semi-annual report was mailed to the Fund's sole external shareholder. As a result of this oversight, we will implement additional formalized procedures to ensure that this error does not occur again.
Also, while not minimizing the impact of our failure to transmit the semi-annual report on a timely basis, we do wish to note that the Fund has only one outside shareholder and, in total, has only two shareholders (i.e., an external ERISA plan and AIG Global Asset Management Holdings Corp., an affiliate of the Fund's investment adviser). These two shareholders have otherwise been provided with ample information from the Fund during the period covered by the semi-annual report, and have continued to be provided with information for the period after September 30, 2004. For example, since the Fund commenced operations, we have been providing these two shareholders with monthly reports regarding the Fund, which include detailed information and analysis regarding the Fund's portfolio composition and performance, in conformity with their request for certain specific information regarding the Fund. The information provided in these reports is substantially more detailed than the information required to be included in the Fund's semi-annual report. In addition, the shareholders have received monthly account statements on the value of their holdings in the Fund. While we are not suggesting that this somehow excuses our failure to transmit the Fund's semi-annual report to shareholders on a timely basis, we do wish to assure you that Fund shareholders have been receiving timely financial information from the Fund. In addition, since we discussed this matter with you, we have contacted our one external shareholder to explain the reasons for the untimely delivery of the semi-annual report and to respond to any questions regarding the matter.
We hope this responds to your comments regarding the reasons for the noted delays and we further hope that the Division of Investment Management will re-consider its decision regarding the timeliness of the Form N-CSR. In this regard, we would be happy to formally amend the Form to supplement the reasons for the request for extension in order for the Division to re-consider this decision.
If you have any further questions or comments, please feel free to contact me at 212-770-9042.
Sincerely,
/s/ Richard S. Biegen
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CORRESP
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correspondence.htm
AIG Strategic Hedge Fund of Funds
599 Lexington Avenue
New York, NY 10022
March 14, 2005
VIA EDGAR (CORRESPONDENCE)
Ms. Christina L. Delano
Accountant
Division of Investment Management
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: AIG Strategic Hedge Fund of Funds ("Fund") (File No. 811-21590)
Dear Ms. Delano:
In response to your letter dated February 1, 2005 to Robert Disclolo, President and Principal Executive Officer of the Fund, we wish to provide you with greater detail regarding the reasons we requested an extension of time to file the Fund's Form N-CSR (as requested on Form 12b-25), as well as the reasons for the delay in the transmittal of the Fund's semi-annual report to shareholders. At the outset, we also want to take the opportunity to assure you that we understand and appreciate the importance of filing Fund reports (and other required filings) with Securities and Exchange Commission ("Commission) on a timely basis, as well as providing Fund shareholders with reports (and other information) on a timely basis. As a result, in response to these recent delays, we will be implementing additional formalized procedures to ensure that future Fund reports will be filed with the Commission, or transmitted to Fund shareholders, on a timely basis.
Comments to Notification of Late Filing on Form 12b-25
With regard to your specific review of our Notification of Late Filing on Form 12b-25 filed on December 9, 2004 relating to the Fund's Form N-CSR for the fiscal period ended September 30, 2004, you commented that "[w]e have evaluated your response to Part III of the Form and have found your reasons for the extension of time, or lack thereof, to be insufficient." As a result, you note that you do "not consider the Registrant's Form N-CSR to have been filed timely." In addition, you noted that the Fund failed to mail its semi-annual report for the period ended September 30, 2004 to the Fund's shareholders within 60 days after the close of the period.
As discussed with you on February 16, 2005, we wish to provide you with greater detail regarding the reasons for the delay in filing of the Form N-CSR and the transmittal to shareholders of the semi-annual report. In addition, we wish to request that the Division of Investment Management reconsider its initial decision regarding the timeliness of the Fund's filing of the Form N-CSR. If necessary, we would be prepared to amend our Form 12b-25 in order to provide greater detail (as discussed herein) regarding the reasons for the delay.
As you discussed with Philip J. Dunne, Principal Financial Officer of the Fund on January 28, 2005, the Fund commenced operations on August 1, 2004 and the Form N-CSR only covered the two-month stub period from commencement of operations through September 30, 2004, the end of the Fund's semi-annual period. As you discussed with Mr. Dunne, since the Fund had just commenced operations, management of the Fund determined, in an abundance of caution, that the Fund and its shareholders would be best served by delaying the filing of the Form N-CSR for several days in order to have additional time to review the Fund's first set of financial statements and to ensure that the Fund's newly adopted Disclosure Controls and Procedures were being properly implemented prior to the filing. As a result, Fund management determined to file the Form 12b-25 in order to request an extension of time to prepare and file its Form N-CSR. In this regard, we wish to emphasize the fact that the delay was not due to any concerns or disagreements relating to the accounting underlying the financial statements, or due to any problems discovered while carrying out the Disclosure Controls and Procedures. Instead, the delay was simply due to a judgment on behalf of Fund management that the delay would provide the Fund with more time to ensure that the newly adopted Disclosure Controls and Procedures were being properly implemented and that the Form N-CSR was completely accurate.
Transmittal of Semi-Annual Reports to Shareholders
With regard to the delayed mailing of the semi-annual reports to shareholders, as you discussed with Mr. Dunne on February 1, 2005, this was due to a miscommunication between the Fund's service providers. While management of the Fund believed that the mailing of the semi-annual report had been sent to the Fund's sole shareholder by the Fund's sub-administrator, PFPC, Inc., we were later informed that the mailing had not occurred. Upon discovery, we notified our sub-administrator that the mailing had not been made and on February 1, 2005, the semi-annual report was mailed to the Fund's sole external shareholder. As a result of this oversight, we will implement additional formalized procedures to ensure that this error does not occur again.
Also, while not minimizing the impact of our failure to transmit the semi-annual report on a timely basis, we do wish to note that the Fund has only one outside shareholder and, in total, has only two shareholders (i.e., an external ERISA plan and AIG Global Asset Management Holdings Corp., an affiliate of the Fund's investment adviser). These two shareholders have otherwise been provided with ample information from the Fund during the period covered by the semi-annual report, and have continued to be provided with information for the period after September 30, 2004. For example, since the Fund commenced operations, we have been providing these two shareholders with monthly reports regarding the Fund, which include detailed information and analysis regarding the Fund's portfolio composition and performance, in conformity with their request for certain specific information regarding the Fund. The information provided in these reports is substantially more detailed than the information required to be included in the Fund's semi-annual report. In addition, the shareholders have received monthly account statements on the value of their holdings in the Fund. While we are not suggesting that this somehow excuses our failure to transmit the Fund's semi-annual report to shareholders on a timely basis, we do wish to assure you that Fund shareholders have been receiving timely financial information from the Fund. In addition, since we discussed this matter with you, we have contacted our one external shareholder to explain the reasons for the untimely delivery of the semi-annual report and to respond to any questions regarding the matter.
We hope this responds to your comments regarding the reasons for the noted delays and we further hope that the Division of Investment Management will re-consider its decision regarding the timeliness of the Form N-CSR. In this regard, we would be happy to formally amend the Form to supplement the reasons for the request for extension in order for the Division to re-consider this decision.
If you have any further questions or comments, please feel free to contact me at 212-770-9042.
Sincerely,
/s/ Richard S. Biegen
Richard S. Biegen
Chief Compliance Officer
cc: Frank Donaty
Assistant Director
Division of Investment Management
Louis P. Becka
Assistant Director
Office of Compliance Inspections and Examinations
Brian Bullard
Chief Accountant
Division of Investment Management
David Leahy
Counsel to the Independent Trustees of the Fund
Jane A. Kanter
Counsel to the Fund