Digital Assets Report

Newsletter

Like this article?

Sign up to our free newsletter

Hedge fund managed accounts industry could double in 2010

Related Topics

Sixteen per cent of institutional investors have a current allocation to managed accounts and a further 23 per cent are considering a maiden allocation to a managed account structure over the course of 2010, according to a survey by Preqin.

Greater transparency (41 per cent), better liquidity terms (22 per cent) and increased regulatory oversight (22 per cent) were the three most common reasons stated by investors for adding managed accounts to their portfolios.

Sixty five per cent of fund of funds managers surveyed are either currently running a managed account for their clients or considering doing so in the next 12 months.

Additional transparency (32 per cent of respondents), liquidity (25 per cent), and investor demand (18 per cent) are the most common reasons why fund managers began offering these structures to their investors. 

Sixty per cent of managers based in North America currently run managed accounts, compared with 40 per cent of European managers and 44 per cent of managers based in Asia and the Rest of World region.

Bigger managers are more likely to be offering managed accounts, with half of managers with over USD500m in assets under management currently operating a managed account structure. 

However, smaller managers are increasingly offering managed accounts. In 2010 Preqin expects smaller firms to begin offering managed accounts in greater numbers to accommodate growing investor demand. 

Amy Bensted, manager, hedge fund data, says: “The use of managed accounts is clearly becoming more mainstream, with 16 per cent of investors surveyed currently using them to some degree within their portfolios and a further 23 per cent considering an allocation in 2010. As more and more managers begin to offer this structure, and the range of managed account options available to investors continues to grow, we expect more institutions to add managed accounts to their hedge fund portfolios in future. Managed accounts are able to offer the increased liquidity and transparency that institutional investors demanded following the credit crisis; however the cost in terms of initial investment size as well as internal resources will always be prohibitive for some smaller institutional investors.” 

Like this article? Sign up to our free newsletter

Most Popular

Further Reading

Featured