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Alternative Market Briefing

Market participation, risk management and cost of regulations worry hedge fund managers

Tuesday, December 03, 2013

Precy Dumlao, Opalesque Asia:

Low participation rate in markets, sophisticated risk management and the cost of regulation are the major challenges that worries investors, hedge fund managers who participated in the latest Opalesque 2013 Chicago Roundtable, sponsored by FFastFill, Eurex and Taussig Capital said.

Alex Brockmann, portfolio manager at TradeLink Capital told participants of the Roundtable, "Maybe the thing I worry most about is the low participation rate in markets. Many markets are characterized by a sort of thin class of participants that are actually driving most of the action. At times we do not see the broad follow-through in our strategies, and this applies both to trades that last two days or a couple of months."

He explained that market environments without broad participation from investors tend to be very tricky for systematic traders. The challenge is compounded when there are many events that cause short-term movement without much follow-through. It is difficult navigating these periods well while also trying to participate strongly when momentum is prevalent in markets.

Paul MacGregor, Managing Director of Product Strategy at FFastFill, added that one of the ......................

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