Transformation of corporate governance models in investment funds

CJSC «Management Company», Tramvainyi Ave, 15, 620041 Yekaterinburg, Russian Federation

^* Corresponding author: metzger@azkapital.ru

Abstract

The article is devoted to the phenomenon of corporate governance in investment funds, as one of the key elements ensuring the effective functioning of this institution of financial intermediation. A narrow and formal understanding of the term “corporate governance” in mutual funds is reduced to the relationship between owners and leaders of the management companies. This problem is devoid of practical sense in the context of highly concentrated ownership in these companies. The author proposes an expanded interpretation of corporate governance based on considering an investment fund as an “investment corporation”, in which the participants are various categories of investors, fund management, as well as a number of other participants and stakeholders, depending on the nature of the investment process. Considering corporate governance as a system of control and management in Russian investment funds, the author comes to a number of conclusions. The current model considers the protection of the interests of fund investors from the opportunism of managers as a priority and meets the specifics of a certain market segment. The same model, but under different conditions, becomes redundant or even destructive. The analysis of the specifics of the activities of the investment funds for qualified investors makes it possible to formulate adequate changes in the corporate governance model. These include: 1) the transition to a model of coordinating the interests of the investors (controlling and minority), as well as other participants in the investment process, 2) reducing external regulation and moving to internal mechanisms for assessing and making decisions, taking into account the qualifications of the participants themselves, 3) limiting or compensation for the excessive influence of the controlling investor with a concentrated structure of investors.