Tue, Jan 27, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
New Managers September 2012

Focus - Should emerging managers go to investment consultants?

Should emerging managers go to investment consultants?

As long as there is a need for expertise in any industry, there will be expert consultants offering their knowledge and services. The hedge fund industry is no different. Hedge fund consultants service hedge funds with their know-how and network - be it in investment strategy, research or marketing.

Investment consultants, which are the focus of this article, help investors, particularly institutional investors with their hedge fund allocations. Those consultants are gaining more cachet in the industry and are often directly competing with funds of hedge funds.

According a Citi Finance's survey published in June 2012, titled Institutional Investment in Hedge Funds: Evolving Investor Portfolio Construction Drives Product Convergence, global assets invested with hedge fund firms could rise from today's $2.1 trillion to more than $5 trillion as a result of two emerging trends. Firstly, institutional investors may add $1 trillion to protect against risks and get more diversification; secondly, as there may be a "convergence zone" between hedge funds and traditional assets, an additional $2 trillion could come into the hedge fund industry in the form of regulated alternatives and long-only products.

The Citi survey also observes a trend among intermediaries, such as consultants and funds of funds, in which there is also convergence.

The number of hedge funds grew by 66% from 2003 and 2007 (4,598 to 7,637), and the number of "fund of fund intermediaries" (funds of hedge funds or FoHFs), grew by 251% in this period - from 781 to 2,462 (Source: HFR). During those years, says the Citi survey, FoHFs were the primary conduit through which many institutional investors channell......................

To view our full article please login

This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.
New Managers
New Managers
New Managers

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. Investing - U.S. investors favor currency hedged Europe ETFs as euro tumbles, Quants win back investors as Swiss franc fuels volatility gains, David Einhorn's $7bn hedge fund is loading up on this stock, Hedge fund BlueMountain Capital unveils Ocwen Financial short, claims default on notes[more]

    U.S. investors favor currency hedged Europe ETFs as euro tumbles From Reuters.com: U.S. investors stung by the falling euro who want to stay invested in Europe are turning to exchange-traded funds designed to strip out the impact of the region's currency. The biggest among so-called "cur

  2. News Briefs - Millennials use tech tools to jump into investing, Winklevoss twins to launch bitcoin exchange with FDIC insured deposits, Robertson’s legacy from hedge funds to New Zealand, Real estate managers exploring smaller open-end funds[more]

    Millennials use tech tools to jump into investing It is the Facebookification of monetary investing. From social networking platforms that enable young investors to stick to every other's stock-picking mojo, to internet sites for initially-timers hungry for a piece of the Silicon Valley

  3. Top performing private equity firms you should invest in[more]

    Komfie Manalo, Opalesque Asia: Professor Oliver Gottschalg of Paris-based HEC Business School, also known as Ecole des Hautes Etudes Commerciales de Paris has released his annual ranking of the top performing private equity firms. The 2014 HEC-DowJones Private Equity Performance Ranking

  4. Comment - Why invest in hedge funds if they don't outperform the market?[more]

    From Forbes.com: Hedge funds have always been a bit exotic and an enigma to some, but bottom line they are supposed to produce good returns using a range of strategies including global macro, event driven and relative value (arbitrage). And, sophisticated or high-net-worth individuals (HNWIs) could

  5. Owen Li 'truly sorry' for blowing up $100m of hedge fund’s assets[more]

    From CNBC.com: A hedge fund manager told clients he is "truly sorry" for losing virtually all their money. Owen Li, the founder of Canarsie Capital in New York, said Tuesday he had lost all but $200,000 of the firm's capital—down from the roughly $100 million it ran as of late March. "I take r