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Alternative Market Briefing

Investcorp's Alpha Project brings clarity to hedge fund fees versus alpha generated

Friday, July 01, 2011

amb
Deepak Gurnani
From Kirsten Bischoff, Opalesque New York:

Alternative investment firm Investcorp manages over $12bn (of which approximately $5bn is invested through hedge funds investments), and has built an enviable investor base of "sticky money" with 90% of assets flowing from institutional investors. In the latest Opalesque TV interview, head of hedge funds investing at Investcorp, Deepak Gurnani explains that the firm has amassed such a large institutional investor base by focusing on risk management.

With a business that focuses on customized solutions for investors, as well as funds of funds, a single manager platform and seed vehicles, Gurnani’s team must track and evaluate managers across every strategy and region, and determine the risk/reward profile of managers so they can advise clients on allocations according to the needs of their larger investment portfolios. "Hedge funds do attract the best investment talent, but when it comes to managing risks, the, focus is, I would say is, at best, average," he comments.

That risk management focus that fund of funds and consultants put to work evaluating hedge funds is more obviously necessary in the wake of the 2008 financial crisis. Gurnani joined Investcorp in 1993, and the firm's investors were able to see the importance of strong risk management in the......................

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