Opalesque Exclusive: K2’s David Saunders recommends hedge funds seeking institutional allocations pay more attention to client servicing

Alternative Market Briefing

Opalesque Exclusive: K2’s David Saunders recommends hedge funds seeking institutional allocations pay more attention to client servicing

Friday, November 06, 2009

From Kirsten Bischoff, Opalesque New York:

In addition to addressing concerns about hedge fund liquidity, transparency, and fee structures, managers seeking allocations from institutional investors might also consider concentrating on how they build (or re-build as the case may be) their investor relations departments.

In the past, hedge funds have not always given enough thought to client servicing and outbound marketing, David Saunders, founding managing director of the local fund of funds K2 Advisors said during Thursday’s Connecticut Hedge Fund Association Global Alpha Forum. In the past, as assets were flowing inbound to the hedge fund industry firms did not always actively solicit institutional investors, but Saunders pointed out – institutions are used to people knocking on their doors.

Potential for explosive growth as institutions change their hedge fund philosophies Saunders said that after being ‘frozen’ for 9-12 months, institutional investors began to initiate investment processes again in June and he expects them to continue those processes over the coming months. His positive outlook for the potential future growth hedge funds in institutional investor allocations is driven by the apparent strategy changes in some institutions are making in their approach to hedge fund investing.

The financial crisis ......................

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