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From Kirsten Bischoff, Opalesque New York:
Many trends have had their “15 minutes of fame” during the financial crisis, as managers and investors alike investigate ways to build stronger, more attractive methods for hedge fund investing. In the most recent Opalesque Roundtable (Connecticut), part of the discussion focused on one of the most popular of these trends: managed accounts. As the popularity of managed accounts nears its 16th minute of fame, it may be time to consider them part of a permanent shift in hedge fund investing.
Custody, more than transparency or liquidity, drives investor demand
Much of the focus on managed accounts came in the wake of the discovery of the Madoff fraud, as investors sought more transparency into manager portfolios. However, Ken Shewer, chairman of US based The Kenmar Group sees the growing investor demand for managed account access as being driven more by desires to control asset custody than by desires for further transparency or liquidity.
Counterparty risk may have declined through 2009 as government support to the banking industry worked to counter the fallout of the Bear Stearns and Lehman collapses. However, those who dealt with the day-to-day realities of this risk through the end of 2008 will not soon forget how precarious the situation was.
Virginia Parker, founder of ...................... To view our full article Click here
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