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Benedicte Gravrand, Opalesque Geneva:
Managed accounts are not a panacea to hedge fund risks and their true benefits can only be had by those who bring in large amounts. This is something that panelists at Terrapinn’s Hedge Fund World Zurich conference last week agreed upon.
In a perfect world, having a managed account is having your money segregated from the rest, with high liquidity and greater control than in a fund. But it’s not really that easy.
LGT Capital Partners, a funds group based in Switzerland, has invested in managed accounts for ten years. According to Jamie Castan, co-head of hedge fund investment management at LGT, only sophisticated and large institutions have shown interest in managed accounts. “The ultimate advantage is that few can afford it, as the minimum requirement for non-comingled assets is $100m,” he said. The rest participates in platforms and lose the non-comingling advantage.
Managed account clients are supposed to be more concerned with the control of their assets than with the liquidity. However when Castan worked at Man previously, on the hedge fund side, he rarely heard intelligent questions being posed by investors. Nobody was using the transparency that was provided.
So if you don’t have $100m or so for your own account, the next best thing would be to go on a platform. But investors beware of which one to go for.
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