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Matthias Knab reports live from Geneva: Sandra Manzke, Co-Chairman and Co-CEO of Tremont Global Advisors said in her keynote address at the Geneva GAIM Invest/Fund of Funds conference she expects the hedge fund universe to grow to 20,000 managers in a few years. Retail investors will continue to enter the hedge fund space, but corporate and public pension funds will be the drivers for the necessary shifts in institutional asset management. The days of classical asset allocation between equities, bonds and some PE are over, according to Manke.

Manzke also thinks SEC registration is “a good thing”, since it further legitimates the industry and increases institutional comfort. She sees hedge fund investments bifurcating – on the one hand manager type A who caters foremost institutions, which according to polls seek 8% returns, and manager type B who is searched out by HNW individuals who look for the 10-12% returns. Manager A gives institutions the liquidity and transparency. Institutional fund selection will include more capacity analysis and sectoral/style considerations; new styles will be examined. Reporting standards will be upgraded, since a monthly report won’t suffice. Sophisticated risk management will be deployed.

Large institutional FOFs will lead the institutional markets. Manzke said managed account platforms are somewhat troublesome because of the different treatment investors get as to liquidity. Compliance will be of utmost importance – as much as becoming ......................

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