Tue, Jul 7, 2026
A A A
Welcome Guest
Free Trial RSS pod
Get FREE trial access to our award winning publications
Alternative Market Briefing

$100bln in leveraged FOFs may be biggest risk for industry, Paloma urges investors to `ask harder questions`

Friday, December 03, 2004

Matthias Knab reports from the HedgeFundsWorld conference in Tokyo: S. Donald Sussman, chairman and CEO of Paloma Partners says he is an optimist for the hedge fund industry but a realist about the necessary changes. According to Sussman, the dramatic asset flows into hedge funds are just a part of a larger transformation of institutional money management. And this is just the start – within the next few years we will witness significant product innovation, portfolio restructuring and industry realignment.

Sussman thinks the weak performance so far this year is a temporary issue, and urges to look into the difficulties that have a more permanent character, concerning transparency, risk management and backoffice controls. For hedge funds that take their business serious it will be necessity to show “excellence” in these areas. Talking to investors, Sussman dearly recommends all to ask “harder” questions, to go out and “see for yourself”, not to rely on prospectuses or promises, even to control the FOF manager.

As to pricing, Mr. Sussman recommends all investors to check with each manager: 1. Are there written guidelines? 2. Do the manager and the administrator have the experts and the resources to price all positions, especially OTCs? 3. Is the valuation method consistent over the years? Paloma Partners offers all interested investors a guidebook written by Leon Metzger to master this area, which can be obtained at the firm. Company website ......................

To view our full article Click here

Previous Opalesque Exclusives                                  
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Other Voices: Nvidia extraordinary growth and the challenge of sustaining demanding valuations over time[more]

    Antonio Di Giacomo, Senior Market Analyst at XS.com, writes: Nvidia has established itself as one of the most extraordinary growth companies in the global technology sector. Over the past two fiscal years, its revenues have risen from levels close to $60 billion annually to well above $120 billi

  2. Secondaries take center stage: What the 2026 PE landscape means for GPs and investors[more]

    Matthias Knab, Opalesque for New Managers: The 2026 edition of Dechert's Global Private Equity Outlook - "Signs of a Gradual Thaw" - marks a notable shift in industry sentiment. After years of compr

  3. And, finally: Time to share it with the people[more]

    From Newsoftheweird: Leavenworth, Washington, has become a tourist destination because of the Bavarian theme businesses have adopted there, NPR reported. One shop, the Leavenworth Nutcracker Museum, houses the world's largest nutcracker collection, thanks to 101-year-old Arlene Wagner. Wagner sta

  4. Opalesque Exclusive: Private Markets Evergreen Funds - An Insider's View[more]

    Matthias Knab, Opalesque for New Managers: Private Markets Evergreen Funds: What Investors Need to Know Before They Dive In The democratization of private markets is well underway. Structural barriers t

  5. Opalesque Exclusive: Governance, Scale, and Boutique Resilience in a Consolidating Hedge Fund Industry[more]

    Matthias Knab, Opalesque for New Managers: The hedge fund industry has undergone significant consolidation in recent years, with capital increasingly concentrated among large multi-strategy platforms. Yet boutique m