Sat, Aug 27, 2016
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. Strategies - The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I, Hedge funds get more pushback on terms as enthusiasm for strategy wanes[more]

    The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I From IBTImes.co.uk: To illustrate a strategic gap common to today's portfolio managers, George Sokoloff, PhD, founder and CIO at Carmot Capital, proposes an interesting thought experiment – a breakdown of

  2. Institutional investors - Investors set to increase allocation to private debt, With investment income key, Richmond retirement system faces funding challenges[more]

    Investors set to increase allocation to private debt Investors are set to increase their allocation to private debt, with 60% revealing they believe the private debt market will grow over the next 12 months, according to a new study by Elian, a leading funds services provider. 41%

  3. Investing - Hedge funds snap up banks, unload Apple, Some of hedge funds' favorite stocks are finally starting to beat the market, Einhorn's Greenlight shifts positions, Treasury yield climbs to two-month high as Fischer joins hawks, 9 stocks smart investors put their money in last quarter[more]

    Hedge funds snap up banks, unload Apple From Barrons.com: Prominent hedge funds have a newfound love of big banks, and some have a distaste for shares of Apple, regulatory filings released last week show. The filings suggest that the funds have been pivoting their portfolios in recent mon

  4. Chesapeake energy seeks $1 billion loan to refinance debt[more]

    From Bloomberg.com: Chesapeake Energy Corp. is seeking a $1 billion loan as the company battered by cratering fuel prices and credit downgrades takes a step to address its $9 billion debt load. The natural gas producer hired Goldman Sachs Group Inc., Citigroup Inc. and Mitsubishi UFJ Financial Group

  5. Institutions - Nordic pension funds magnify focus on unlisted and direct investing, building up teams[more]

    From IPE.com: As bond yields remain at low or negative levels, pension funds and other institutional investors in the Nordic region are stepping up efforts to find higher returns by adding more unlisted investments to portfolios and are expanding in-house teams in order to do this, according to new