Mon, May 25, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
New Managers September 2012

Seeders Corner - Investcorp: Institutions can invest in emerging managers through special programs

Investcorp: Institutions can invest in emerging managers through special programs

Deepak Gurnani

Since 2000, institutional money has been penetrating the hedge fund industry. But since 2088, when a lot of non-institutional money redeemed, most of the hedge fund industry's assets come from institutional sources. Deepak Gurnani, the head of the $5 billion hedge fund business at Investcorp, said during a recent Opalesque TV interview that this is a positive in that it forced the hedge fund industry to focus on risk management and transparency. There is one big concern however coming from this trend, he adds. And that is that most of the institutional money goes to the larger funds. Not that larger hedge funds are bad. But if so much money goes into them, this can lead to "dilution of returns." He authored a paper in 2010 that compared the performance of large funds ($5bn +) and that of new funds (3 years or younger), which are assumed to have less assets.

"We found that over the last seven years, which was the focus period for the study, the emerging funds outperformed the large funds on a risk-adjusted basis. "So, the next logical question was that surely the emerging funds take a lot more risk than large funds and as a result they have outperformed," he explained. "I think what was most interesting was that most of that outperformance came in 2008-2009.

"I would say just 90% plus of the money going into large funds is setting up things for disappointment in the years to come."

Investcorp was set up in 1982 to help investors in the Gulf States invest in companies in the West.It is now an asset manager focused on alterna......................

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. Comment - Top hedge fund managers talk about how easy their jobs have gotten, BlackRock to Schroders warn of Argentina’s $20bn bond glut, The 35-year “investment supercycle” is drawing to a close, says Bill Gross, Gundlach: When the Fed starts hiking rates, 'GET OUT' of this asset class[more]

    Top hedge fund managers talk about how easy their jobs have gotten From Businessinsider.com.au: Time was, before the financial crisis hit, corporate boards treated multi-billion dollar hedge fund managers like Jehovah’s Witnesses pounding on their doors and flashing bibles. But no more.

  2. T Rowe's challenge to Dell deal may fuel critics of 'appraisal'[more]

    From Reuters.com: An increasingly popular tactic used by hedge funds and others to extract more money from buyouts could soon face a major courtroom test when a big investor in Dell Inc may argue that it should be paid a higher price for the 2013 acquisition of the PC maker. The strategy, known as "

  3. News Briefs - Ergen says LightSquared plan unfairly favors hedge funds, Why hedge fund managers make good advisory clients, I learned a lot about dad-bros after spending 4 days in Vegas with 2,000 hedge funders[more]

    Ergen says LightSquared plan unfairly favors hedge funds LightSquared Inc.’s bankruptcy plan gives hedge funds that invested in the broadband company a leg up while blocking telecommunications firms from competing with it, a fund owned by Dish Network Corp. Chairman Charles Ergen said in

  4. Opalesque Exclusive: SEC approves proposed changes to Form ADV, '40 Act - comment period to follow[more]

    Bailey McCann, Opalesque New York: Hedge funds and providers of liquid alternatives will want to pay close attention to proposed reforms approved by the SEC yesterday. The changes will require more frequent reporting, as well as a closer look into social media, liquid alternative strategies, and

  5. New market regime has created more dispersion between managers[more]

    Komfie Manalo, Opalesque Asia: The month of April has marked the transition toward a new market regime, Philippe Ferreira, Lyxor AM’s head of research, managed account platform, commented in the May 5's Weekly Briefing. "The first quart

 

banner