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Dermot Butler From Kirsten Bischoff, Opalesque New York:

Since the hedge fund liquidity crisis of 2007/2008 investors have placed a higher value on liquidity and control, and this has been expressed through an increased interest in managed accounts. In the recent Opalesque London Roundtable, Dermot Butler, Chairman of fund administrator Custom House commented that he has seen throughout 2010 and 2011 an increase in interest in managed accounts, as well as fund of funds, and other vehicles that are more responsible with liquidity matching their needs to the needs of their investors.

However, managed accounts have long been a two edged swords for hedge fund managers. Often the assets that a firm will gain do not make up for the costs for the aggressive oversight and reporting that is required by investors. "Increased back-office functionality, as well as more stringent reporting detail required by plan sponsors in particular, have placed a unique set of demands on fund managers offering managed accounts," says a recent whitepaper released by SunGard. While there is always more effort required, there is also the promise that an investor who is pleased by the performance of a managed account will grow the assets......................

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