Tue, Mar 20, 2018
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
New Managers April 2012

A look at managed accounts


Managed accounts: an alternative structure worth considering

Managed accounts of hedge funds have been around since the 1990s, but really took off after the financial crisis of 2008, as investors then flocked to structures offering more control and more liquidity. The frenzy of '08 may be subsiding, but the fund structure remains popular nevertheless, even if (still) costly and complex to run. But as investors in managed accounts tend to be of the large and experienced institutional kind, this compensates.

Opalesque looked at a few findings and talked to a few industry insiders to uncover this mysterious structure - and found it may be more mysterious than expected, as much of the assets in managed accounts are not reported.

In a managed account structure, a hedge fund manager is an investment advisor who is granted the authority to trade on the account, while the account holder has ownership and control of the assets, explains Moody's, the credit rating and research agency. This arrangement provides investors with more transparency and can also, depending on the type of managed account, generally insulate them from the knock-on effects of other investors pulling out of the fund.

Popularity shot up after 2008

"Although managed accounts have been around for a while, they enjoyed a surge in popularity after the market upheaval of 2008 due to the benefits they offer, such as access to liquidity and ownership of assets," says Joanne Job, a Moody's analyst in a 2010 report. "The financial crisis coupled with many hedge funds imposing liquidity restrictions, prompted investors to look for fund offerings that gave them more control over their investments, and managed accounts filled this market need."......................

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. John Paulson, once the industry's largest hedge fund, to return some investors' money[more]

    Komfie Manalo, Opalesque Asia: John Paulson is reported to be retuning some of his investors' money as a number of his hedge funds continue to suffer setbacks, reports

  2. Investing - Hedge funds amass big bets against world's leading advertisers, Investor Elliott Management buys tiny stake in Wipro[more]

    Hedge funds amass big bets against world's leading advertisers From FT.com: Hedge funds have amassed bearish bets of more than $3bn against the world's largest advertising companies in an attempt to profit as the industry undergoes ongoing wrenching disruption and slowing growth. Funds i

  3. News Briefs - Investcorp to launch a $100 million PE fund for Omani pension funds[more]

    Bahrain-based investment firm Investcorp will soon launch a $100 million fund dedicated to Oman's Pension Funds as part of its investment plan. 'The Opportunities Fund' will be focused on private equity investments in the U.S. and Europe and will target mid-sized companies across a broad range of se

  4. DoubleLine's Gundlach sees U.S. 10-year Treasury yield rising, weighing on stocks[more]

    From Reuters/Streetinsider.com: Jeffrey Gundlach, the chief executive of DoubleLine Capital and known on Wall Street as the "Bond King," said on Tuesday the yield on the U.S. 10-year Treasury note will likely move higher and pressure riskier assets including equities and junk bonds. Gundlach, on an

  5. SEC charges Theranos CEO Holmes with fraud[more]

    Bailey McCann, Opalesque New York: The SEC has charged Elizabeth Holmes, founder and CEO of Theranos and its former President Ramesh "Sunny" Balwani with raising more than $700 million from investors through an elaborate, years-long fraud in which they exaggerated or made false statements about t