Thu, Jul 30, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: Chasing shadows: should hedge funds shadow administrators?

Wednesday, March 27, 2013

This article was provided by Bijesh Amin, Co-Founder/Managing Director at Indus Valley Partners.

To shadow or not to shadow

At least that is the question facing many large hedge funds with assets well above the magical $1bn mark.

The production of a portfolio NAV (Net Asset Value) is the basis upon which investors pay fund managers their performance fees on the one hand and often the basis upon which they give capital to funds on the other. The majority of hedge funds use a Fund Administrator (e.g. Citco, GlobeOp, BNY Mellon etc.) to calculate their NAV and in some cases perform a range of portfolio accounting functions, reconcile their trades, and prepare investor reports.

Investors will often insist on the use of a fund administrator given they can be seen as an impartial 3rd party to value portfolios, and in light of well-documented be a sensible requirement.

However the handing over of such a key metric such as NAV is causing sleepless nights for many funds, particularly those trading illiquid assets (which can be price that can be seen from a Bloomberg terminal or Level 3 assets in valuation parlance). Portfolio managers may be loathe to hand over the basis on which their performance fees are calculated to people who do not trade the asset classes for a living and have probably never been practically or academically trained in the valuation of those assets.

So naturally the question arises that even if an administrator is being used, should a ......................

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. Bridgewater turns bearish on China[more]

    Komfie Manalo, Opalesque Asia: The world’s biggest hedge fund Bridgewater Associates and one of the most vocal of China’s potential is now turning its back against the world’s second largest economy as it joins a growing list of high-profile investors who are challenging China’s potentials.

  2. Opalesque Exclusive: Despite bumpy June/July, CTAs hold on[more]

    Bailey McCann, Opalesque New York: To say that things have been rocky in managed futures recently is putting it mildly. In June, the industry saw its worst month on a performance basis in the past four years. Then yesterday,

  3. Launches - Ex-Brevan Howard star Rokos builds team for new fund, Former Och-Ziff manager’s firm starts health care hedge fund, Industry veterans launch commodity investment firm Aron Capital Management, Nikko Asset Management launches two UCITS funds, Capital Group plans to debut Asian investor targeted fund[more]

    Ex-Brevan Howard star Rokos builds team for new fund From WSJ.com: Chris Rokos, a former star trader at Brevan Howard Asset Management LLP, has hired an economist from Nomura to join the team he’s assembling for his much anticipated hedge fund launch. Mr. Rokos, whose firm is due to b

  4. Institutions - Pension fund dismisses Texas consultant, Rhode Island pension fund gets 2.2% investment return, far below assumed rate of 7.5%, New Jersey pension investments see a drop-off in returns[more]

    Pension fund dismisses Texas consultant From Sandiegouniontribute.com: The county retirement board on Thursday terminated the Texas consultant who was given the reins of the $10 billion pension fund, and whose investment picks left many employees and retirees feeling taken for a ride.

  5. SWFs - Sovereign wealth funds paid around $14 billion in fees[more]

    From SWFinstitute.org: When it comes to the financial sector, asset management is one of the most profitable industries in the world. The Boston Consulting Group put out a 2014 figure saying there is US$ 74 trillion worth of professionally-managed assets. One of the fastest growing institutional inv

 

banner