Fri, Mar 29, 2024
A A A
Welcome Guest
Free Trial RSS pod
Get FREE trial access to our award winning publications
New Managers June 2012

Q&A - Sapient: Hedge funds must face changes in central clearing and in collateral management.

 

Sapient: Hedge funds must face changes in central clearing and in collateral management

Mark Israel

Mark Israel helps lead the Investment Management practice at Sapient Global Markets, in Boston. Sapient is a consultancy firm that tackles key issues within financial services. It does a lot of work with regulatory bodies, central banks, and other market participants such as clearing houses.

Israel talks to Opalesque about some the operational challenges that new hedge fund managers must deal with. He also comments on the hedge fund industry's ability to recycle.

Opalesque: What operational challenges must new hedge fund managers deal with nowadays?

Mark Israel: One of the things that we are seeing right now from the operational side is the changes in central clearing and in collateral management, which will have an impact on anyone who trades derivatives, including hedge funds.

Right now, there are sweeping changes of going into central clearing and how that is going to affect tri-party agreements all the way through to their ISDA agreements, and what they're dealing with, and then how they deal with the collateral, and how they actually manage their collateral going forward. We see that creating an interesting dynamic.

Q: Tell me more about this new dynamic.

Mark Israel: That dynamic affects a few things. One, it affects all their processes all the way up to the portfolio manager.

"That means people who make the investment decisions will have to change their measurement techniques."

We are seeing people take the collateral and the swap in the same strategy and same measurement strategy, so they can ac......................

To view our full article please login

This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.
New Managers
New Managers
New Managers

Previous Opalesque Exclusives                                  
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. KKR raises $6.4bn for the largest pan-Asia infrastructure fund[more]

    Laxman Pai, Opalesque Asia: The New York-based global investment firm KKR has raised a record $6.4bn for its second Asia-focused infrastructure fund, underlining investors' continued appetite for private markets. According to a media release from the alternative assets manager, the figure top

  2. Bucking the trend, top hedge fund makes plans for a second SPAC[more]

    From Institutional Investor: SPACs aren't dead. At least not to the folks at Cormorant Asset Management. The life sciences firm, whose hedge fund topped its peers in 2023, is confident it will match the success of its first blank-check company. Last week, the life sciences and biopharma speciali

  3. Benefit Street Partners closes fifth fund on $4.7 billion[more]

    Bailey McCann, Opalesque New York: Benefit Street Partners has closed its fifth flagship direct lending vehicle, BSP Debt Fund V, with $4.7 billion of investable capital across the strategy. Benefit Street invests primarily in privately originated, floating rate, senior secured loans. The fun

  4. 4 hedge fund themes that are working in 2024[more]

    From The Street: A poor earnings report from Tesla (TSLA) has not hurt the indexes on Thursday. The decline in Tesla stock, which is losing its position in the Magnificent Seven pantheon, is more than offset by strong earnings from IBM (IBM) and ServiceNow (NOW) . In addition, the much higher-t

  5. Opalesque Exclusive: A global macro fund eyes opportunities in bonds[more]

    Bailey McCann, Opalesque New York for New Managers: Munich-based ThirdYear Capital rebounded in 2023, following a tough year for global macro. The firm's flagship ART Global Macro strategy finished the year up 1