Fri, Feb 27, 2015
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: Very small CTA averages 6.90% per month since April’14 inception[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: There aren’t many one-man shops around in the hedge fund world but we talked to one. Andrew S. Peskin, who is ba

  2. Opalesque Exclusive: Skënderbeg launches four single-manager funds with Your Wealth AG[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Skënderbeg Funds AGmvK, an investment fund for qualified investors under Liechtenstein law (umbrella fund),

  3. Opalesque Roundtable: Many Swiss investors are questioning the value proposition of hedge funds[more]

    Benedicte Gravrand, Opalesque Geneva: There is a well-known transition among investors in hedge funds between high-net-worth individuals and institutional investors, Ian Hamilton, head of the IDS Group, said during the recent

  4. UCITS HFS Index starts year on positive note with 1.09% gains in January[more]

    Komfie Manalo, Opalesque Asia: The UCITS HFS Index started the year on a positive note gains of 1.09% in January after finishing 2014 with a modest performance of 1.62%. Index provider 2n20 said th

  5. Legal - Case builds against former New York hedge fund ‘Buddy’ Fletcher[more]

    From NYPost.com: Disgraced former hedge fund operator Alphonse “Buddy” Fletcher’s trail of broken promises and red ink just got a little longer. A Manhattan judge has ruled that the 49-year old investor owes his former law firm $2.7 million in unpaid legal bills. Add that to the more than $100