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Alternative Market Briefing

Next financial crisis will be different as fund managers, consultants advise risk management

Tuesday, July 08, 2014

Komfie Manalo, Opalesque Asia:

The next crisis that will hit the financial markets will be different from what the industry had experienced in the past as hedge fund managers and financial consultants advise risk management to be prepared.

Speaking at the latest Opalesque Frankfurt Roundtable 2014, Frank Umlauf, founder and managing partner at investment consulting firm Tajdo Consulting said the coming financial crisis will be different from previous experience.

He said, "The coming crisis will be a bit different from the ones we have had so far. Over the years, we could see how the different asset classes were behaving in stress situations. In equities, we have seen this a couple of times, we know that they are falling and except for small caps retained a certain liquidity that allowed managers to act. We know that credits are not liquid, managers couldn’t reposition the assets. And that’s even more true now where all the investment banks' trading desks are gone. That is also true with convertibles. Therefore, everything that is not a pure government bond will have a certain form of disruption."

The Roundtable, sponsored by Eurex and tax and legal consultant WTS, took place in Frankfurt at the office of WTS.

Umlau......................

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