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Jason Scharfman Bailey McCann, Opalesque, New York:
A new survey from operational due diligence firm, Corgentum Consulting shows that prime brokers are no longer leading the pack as the most important service provider for investors. Instead hedge fund administrators are gaining more prominence as are auditors. I spoke with Jason Scharfman, Managing Partner of Corgentum Consulting, about the findings.
"After the Lehman Brothers disaster, many investors placed significant importance on the role of prime brokerages," said Jason Scharfman, Managing Partner of Corgentum Consulting. "The survey data indicates a potentially dangerous shift in the opposite direction signifying that investors have reverted to their old ways and are devaluing the role of prime brokers."
According to respondents, only 17% feel as though prime brokers are the most important service provider, where as administrators and auditors eclipsed more than 30% of the top rankings. Not only are investor perceptions shifting when it comes to primes, 74% now feel that administrators are ultimately responsible to them - a shift that doesn't really track with the facts.
"Investors feel like administrators hold their primary allegiance to them, but that is really disconnected from the fact that administrators are ultimately responsible to the fund. The perception may be handy for funds leaning on 'independent' valuations, but overall its not the type of trend we like to see," S...................... To view our full article Click here
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