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Alternative Market Briefing

Investors – Veteran Asia HF commentator Peter Douglas does not think Sandra Manzke`s letter is representative

Tuesday, November 25, 2008

Peter Douglas CAIA, founder and principal of Singapore-based GFIA pte Ltd, the first hedge fund consulting firm in Asia, sent his commentary to Opalesque:

An Asian institution forwarded Sandra Manzke’s open letter to me. The comments apply to a minority of the hedge fund industry. I agree that it’s the misdeeds of any minority that tarnish the overall community, but equally the industry does need to stress its prevalent integrity.

We (GFIA, looking at right-sized, predominantly Asian and EM managers) haven’t experienced Sandra’s frustrations. We’ve only had one manager restrict redemptions (in March, substantially cleared up by September); we don’t use leveraged managers or multistrats, and generally the managers we cover have been honest and transparent through the liquidity implosion. We see far more pain and unhappiness at the manager level, many of whom are doing a great job under the circumstances but still seeing their businesses evaporate as panicked investors liquidate. So I find it hard to share Sandra’s pain.

But I’ve met many investors over the last few weeks who, if not quite so impassioned as Sandra, are clearly upset at how the heavyweight end of the industry has been forced to restrict redemptions, and how “safe institutional” propositions have lost double-digit %s… and therefore are resentful of previous performance fees sitting in managers’ bank accounts. It’s clearly, also, been extraordinarily difficult to manage a FoF in the ......................

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