Singapore-based Vulpes Investment, set up by former Artradis founder Stephen Diggle, has a secret weapon to attract institutional assets: Bert V
Singapore-based Vulpes Investment, set up by former Artradis founder Stephen Diggle, has a secret weapon to attract institutional assets: Bert Verdicchio. Verdicchio, as Vulpes’ chief risk officer, is one a growing breed of investment professionals that are joining hedge funds to ramp up independent risk management reported Reuters this week. It’s yet another sign that hedgies are becoming evermore institutional. Verdicchio has the power to hedge or exit positions he feels uncomfortable with but he receives no discretionary bonus and his salary, and judgment, remain independent of the fund’s size. More Asian hedge funds are going down this path to ensure a second tier of risk management is assigned to what can be technical, complex trades.
Asian institutionals have traditionally been heavier with their due diligence than their western counterparts, which perhaps explains this emerging trend. After all, capital raising remains highly competitive. Preqin estimates that 60 per cent of the industry’s total AUM now comes from institutions. The danger of appointing independent risk officers is that smart traders will be hamstrung when it comes to making high-conviction, high-risk bets, with the obvious consequence being potentially lower returns. “Because investors need to see it [risk management], managers are making it a more visible function,” Peter Douglas, principal of GFIA pte, was quoted as saying. The testing demands of institutional investors attracted criticism at GAIM recently but as Diggle commented: “These constraints are ultimately a good idea for investors and therefore good idea for funds.”
