The financial crisis has highlighted some features of using managed accounts to invest in hedge funds hitherto largely ignored by institutional investors and brought to light the immense value of asset control going well beyond the usual transparency and liquidity, which have been abused by manufacturers of structured products. Martin Gagnon, co-chief executive of Innocap Investment Management, argues that institutional investors should let hedge fund managers do what they do best, generate alpha, while taking control over business and administrative risks for which few are well equipped.

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