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From Komfie Manalo, Opalesque Asia:

The current recessionary atmosphere is making investors hesitant to take more significant risk, they are taking more time to enter the market and build up bigger exposures, Uwe Eberle, head of Institutional Sales at Man Investments told participants at the first 2009 Opalesque Roundtable, held last month in Zurich, Switzerland.

Another participant, Dr. Christian Raubach, managing partner at Wegelin & Co. Private Bankers, added that the hedge fund industry had a lot of work to do in rebuilding investor confidence, and he blamed the industry for failing to create transparency regarding embedded risk factors in some strategies.

Raubach said he believed investors' confidence would return if the hedge fund industry addressed the issues of risks, particularly transparency and liquidity. “But we have to have clear and thorough discussions with the clients about realistic outcomes,” he said.

Philippe Pillonel, managing partner at Constellation Capital Advisors, advised fund managers to “be upfront with their investors on volatility.”

“To have the return that people expect within the industry, they have to be able to face volatility, and potentially stomach drawdowns,” he said.

Ernesto Prado, co-founder and CIO of Areca Investment Management, admitted the difficulty faced by managers in explaining to the average investor “what it is that the hedge funds we are invested......................

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