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Alternative Market Briefing

The treasury function of a long/short hedge fund now more important than ever

Friday, April 13, 2018

Komfie Manalo, Opalesque Asia:

The treasury function for any long/short fund has become increasingly more important since 2008 no matter the asset class, said Rick Doucette, CEO and CIO of Antecapio Investment Partners.

But what is the treasury function of a hedge fund? Says Doucette: "The treasury function to me is not just about going to go to Goldman Sachs and pulling one of the guys out of their stock loan area. To me, you want to find people that really understand the concept of what is the best approach to finance a position."

Speaking at the latest Opalesque Connecticut Roundtable, Doucette said that fund managers need to think about how they can best structure a short when looking at borrows. Unlike in the early days where everybody had one prime; now it's not uncommon for people to have two at a minimum, and many fund managers have three to five.

And, "every bank's lending business is different. Some Banks, for instance, use the options market to facilitate a lot of their supply because the people running the desk are option and derivatives guys. In the traditional approach, banks borrow from custodian banks or directly from large institutional investors. Or they may use a combination of the custodian banks / institutional investors as well as their private wealth management business. So you have to know where and how they source their business. You need to look at what ......................

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