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Although record redemptions have taken their toll over the past few quarters, expectations of $50bln of inflows to the industry through the remainder of 2009, have firms jockeying for the best positions to secure a spot on the allocation lists of the pensions and institutional investors these funds are expected to flow from. One of these ways is looking increasingly like offering clients managed accounts.

$3.5bln New York-based firm Prisma Partners, which launched five years ago has approximately half of its assets invested through managed accounts for clients. "Managed accounts mean a lot of things to a lot of people. At Prisma it is a separate fund created for the client at our level so that they are the only investor in the fund," Founder and Managing Partner Girish Reddy told Opalesque. Managed accounts at this fund management level are increasingly attractive to investors who experienced illiquidity or gating problems in 2008 while tied up in comingled funds, he pointed out. One of the firm's new investors was making the switch to such an account structure because of bad experiences in comingled funds, and so Prisma secured the allocation on the strength of both performance and the ability to offer a managed account structure.

In addition to keeping their assets separate, pension funds and other large institutional investors are attracted to the flexibility such managed accounts offer. "We chose this business model because of our experienced team memb......................

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