Asset Tracing Within Corporate Funds

By Haider Ali

Posted: 8th August 2012 08:27

Tracing assets within corporate funds can quite rightly ruffle feathers.  Often bereft of sentiment, corporate guys with corporate funds interspersed with friends in high places can make it quite thorny for assets within corporate funds to be traced at all.  A lot is dependent on corporations and how they set up funds and for what purpose.
 
That’s not to detract from corporate funds because they certainly have their advantages for investors.  They can maximise profits and minimise taxes and this is ultimately the purpose of those who have immersed themselves in corporate funds. 
 
They are structured in such a way that if you to decide to sell units in a fund you have invested in you won’t lose much of your profits to capital gains tax.  Such is often the case in mutual trust funds, where the government swallow a large share of your well earned proceeds.  Corporate funds are also recommended to investors with more clout and a higher net worth who take an aggressive approach to building their portfolios.
 
Through financial investigations and litigation support private companies and government institutions can be tasked with the job of tracing assets within corporate funds.  Examples of both can be illustrated by two entities that have the same role but tread different paths.  The first is a government institution the Financial Services Authority.  The FSA have featured in the media prominently as of late for their role in financially scrutinising the assets of banks that have violated interest laws.
 
This can only be done with government approval or if they themselves are alerted by employees of banks and such.  They cannot be seen as acting for their own accord as this would see them working beyond their capacity as just regulators, instead they would be perceived as the financial police. 
 
Another model is of a private company called Anderson Chance.  As a private company they have more scope to manoeuvre in regards to asset tracing.  They are under no remit to simply comb through documents.  The private company can actually investigate assets of corporate funds by being paid independently. 
 
Anderson Chance can draw upon a pool of resources and can trace ownership, acquisitions, investments and partnerships in all available sectors, be it commercial or private.  Through strategic consultations and intelligence gathering asset tracing within corporate funds can be far easier for them, as they are bound to no interests or higher influences.
 
The difficulty in tracing assets, especially in corporate funds is significant in cases where litigation is involved.  Should a case be made, it is wholly important to be armed with evidence of a person’s wealth before suing them because the prosecution will risk having their case tossed out of court otherwise.  Hidden wealth can create the impression of poverty for men who have designated their corporate funds in tax-havens such as the Cayman Islands. 
 
What is pertinent to know however is many corporate funds leave paper trails.  These can be traced and if followed up properly the assets within those corporate funds can be exposed.  It is far from an easy task but financial investigators that are savvy and experienced in such matters often get the job done.
 
One also has to take into account how variables in markets that can affect corporate funds too.  So many influences - whether they are cultural or political - can influence how corporate funds and the means in tracing them shape up.  Governments getting involved possibly changing laws that could prevent loopholes from being exploited to trace assets within corporate funds can certainly be enacted.  This is why intelligence gathering in the context of asset tracing is so imperative.
 
Due diligence is another aspect of asset tracing that cannot be underestimated.  Tracing assets in corporate funds mean treading on egg shells in order to avoid stepping on very important toes.  Violating confidence and contract breaches can trigger severe ramifications for individuals tasked with looking for assets in corporate funds.  Those private investigators that are given the unwelcome duty of finding the assets must look into the corporate fund backers, analyse intelligence and assess the risks involved before disclosing their findings.
 
Disclosing assets of corporate funds can in some cases mean foraying into murky waters.  Often is the case, people find themselves in a myriad of problems when trying to trace assets, but it is worth remembering they all leave paper trails. 


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