Thu, Oct 19, 2017
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. Regulatory - David Stockman: Trump tax reform overhaul is a pipe dream, stocks are heading for 40-70% plunge, Carried interest tax: How much does it matter?, Odey sees 'terrifying' mix in MiFID, tapering, asset values, Hedge funds come together to share cost of MiFID and research, SEC turns up the heat on U.S. investment advisers, India's Sebi asks hedge funds to report investments in commodity derivatives[more]

    David Stockman: Trump tax reform overhaul is a pipe dream, stocks are heading for 40-70% plunge From CNBC.com: David Stockman is warning about the Trump administration's tax overhaul plan, Federal Reserve policy, saying they could play into a severe stock market sell-off. Stockman, the R

  2. North America - Puerto Rico rejects loan offers, accusing hedge funds of trying to profit off hurricanes[more]

    From TheIintercept.com: Puerto Rico has rejected a bondholder group's offer to issue the territory additional debt as a response to the devastation of Hurricane Maria. Officials with Puerto Rico's Fiscal Agency and Financial Advisory Authority said the offer was "not viable" and would harm the islan

  3. Investing - WPP targeted by short-selling American hedge fund, Sun co-founder sells secretive hedge fund on big chip trade[more]

    WPP targeted by short-selling American hedge fund From Cityam.com: An American hedge fund has mounted a bet against WPP, the world's largest advertising group, with a trade worth almost £90m. Lone Pine Capital has built a short position worth 0.51 per cent of the FTSE 100 company,

  4. Hedge funds up as industry adjusts to rising rates[more]

    Komfie Manalo, Opalesque Asia: Hedge funds have reshuffled their portfolio after nearly four weeks of rising rates as the Lyxor Hedge Fund Index was up +0.2% from 19 September to 26 (+1.1% YTD), fuelled by strong results of global macro funds, Lyxor Ass

  5. Manager Profile - How the world's hedge fund king used 'idea meritocracy' to become a billionaire[more]

    From Forbes.com: In 1982, Ray Dalio made what he calls the biggest mistake of his life. He made a bet that there would be an economic collapse stemming from a debt crisis. And he was wrong. He lost money. He lost his client's money. He had to let people go from his firm and borrow money from his dad