Tue, Oct 21, 2014
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

Banner

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: What's next for trend followers?[more]

    Bailey McCann, Opalesque New York: New research out from Ibbotson touches on a key debate happening among investors and fund managers, specifically whether long term trend followers can survive in the new

  2. Commodities - Oil wreaking havoc on small-cap energy stocks sliding 36%[more]

    From Bloomberg.com: Owning almost anything in the U.S. stock market has been a losing proposition since September. Owning smaller energy companies has been a catastrophe. Hercules Offshore Inc. and Resolute Energy Corp. are among 19 oil-and-gas equities in the Russell 2000 Index that lost more than

  3. Investing - Hedge funds favor equity long/short, Strategic bond managers hedge against further high yield sell-off[more]

    Hedge funds favor equity long/short From Securitieslendingtimes.com: Equity long/short strategies will generate good returns for hedge funds in the future, according to a panel at this year’s Risk Management Association Conference on Securities Lending in Naples, Florida. Panellists Sand

  4. Legal - Ex-hedge fund analyst weeps as judge hands down 5 year sentence, Former Columbus investment manager Steven P. Moore indicted on theft charges, SEBI confirms ban for Hong Kong hedge fund, SEC announces enforcement action against compliance officer[more]

    Ex-hedge fund analyst weeps as judge hands down 5 year sentence From Hereisthecity.com: An ex-hedge fund analyst was sentenced to 5 years in prison for his role in insider-trading scheme. The New York Post reports that former hedge fund analyst Matthew Teeple was sentenced Thursday to fiv

  5. Sparx optimistic about outlook for Japan[more]

    Benedicte Gravrand, Opalesque Geneva: According to SPARX, there are causes to be optimistic about the outlook for the Japanese market and the country's economy in general. Sparx Asset Management is a Tokyo-based asset manager, part of