Sat, Jul 30, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

1:1 liquidity correlation may not be enough

Wednesday, December 05, 2012

Benedicte Gravrand, Opalesque Geneva:

Raimond Schuster, CEO of ISP Securities, an independent global financial services firm with CHF1.5bn in AuM ($1.6bn) and offices in Zurich and in Israel, believes the current discussion on liquidity is changing the environment for hedge funds. He explained why at Terrapinn’s Hedge Funds World conference in Zurich in November 2012.

Liquidity correlation

ISP Group has invested in hedge funds since 1994, and has managed its own fund of hedge funds (FoHF) since 1997. The old school approach of managing liquidity in a FoHF portfolio involved spreadsheet listings, which estimated how much of the portfolio was in liquid assets, Schuster started. But this did not necessarily show the real picture.

According to Schuster, a traditional hedge fund portfolio consists of liquid and transparent strategies that take directional bets in listed instruments, and of illiquid strategies that employ the liquidity facilities of financial intermediaries. But late 2008 showed that the illiquid strategies were too dependent on the interbank liquidity, as when those dried up, the illiquid strategies suffered from heavy drawdown or became illiquid (or both).

"One can even ask whether a 1:1 liquidity correlation is enough," he noted.

After that, investors who needed liquidity redeemed from their funds, and found that......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Opalesque Exclusive: California-based manager launches long/short equity hedge fund with unique algorithm[more]

    Benedicte Gravrand, Opalesque London for New Managers: SJL Capital LLC, an investment advisory firm based in California, has launched its maiden fund, the SJL MarketDNA Hedge Fund LP. The fund, which began trading

  2. Manny Roman to move from Man to Pimco[more]

    Benedicte Gravrand, Opalesque London: Emmanuel (Manny) Roman, an investment world veteran, has been hired by PIMCO, the large US bond fund house, as chief executive officer. PIMCO's current CEO Douglas Hodge will assume a new role as managing director and senior advisor when Roman joins P

  3. Opalesque Exclusive: ArbitrOption outperforms benchmarks, up 7.18% in H1[more]

    Komfie Manalo, Opalesque Asia: Independent registered advisor ArbitrOption breezed through the tumultuous Brexit referendum and outperformed its benchmarks. ArbitrOption was up 7.18% in the first half of 2016 compared to the S&P 500 which gain

  4. Europe - European hedge funds shrink and shutter as turmoil hurts returns, Investors go bargain-hunting for U.K. property after Brexit vote, Brexit: Guidance for fund directors - what to know and what to ask[more]

    European hedge funds shrink and shutter as turmoil hurts returns From Bloomberg.com: Europe’s hedge-fund industry contracted for a sixth straight quarter as the U.K.’s decision to leave the European Union and concerns that China’s growth is slowing caused losses and forced some money man

  5. Platinum Partners starts liquidation of hedge funds following municipal union kickback scandal[more]

    Komfie Manalo, Opalesque Asia: Platinum Partners, the hedge fund in the middle of a New York City municipal union kickback investigation, is reported to be liquidating two of its funds, the New