Last year Lyxor’s Managed Account Platform continued to go from strength to strength. A total of 28 new funds were onboarded to the industry’s largest individual commingled managed account platform across a diverse range of strategies including special situations, merger arbitrage, emerging market long/short equity, global macro and long/short credit.
Four tenets – liquidity, performance, risk and transparency – make the Lyxor MAP a leading platform and have helped total assets under management rise to some USD11bn as of January. Around 120 funds, including both mutualised and dedicated funds, are now available, offering unparalleled levels of transparency. Lyxor prides itself on making the best managers available to investors and places great emphasis on innovation, selecting niche funds not typically available on other platforms.
Head of MAP research Stefan Keller says that in terms of product innovation the focus in 2011 was on three themes in line with investors’ needs: emerging markets, with the addition of names including Ortus (FX trading), Lighthorse (China long/short equity) and BNY Mellon ARX (Brazil long/short equity); multistrategy, with the launch of three funds in partnership with Balyasny Asset Management, George Weiss Associates and AQR Capital Management; and long/short credit arbitrage.
“We covered all geographic regions: Income Partners (Asia), Constellation Capital (Latin America), Henderson (Europe) and Advent (US),” Keller says. Long/short equity managers make up the majority of funds on the platform, but event-driven and risk arbitrage funds, CTAs and global macro are also well represented.
Established managers such as Cheyne Capital, AQR, Brevan Howard, BlackRock and Traxis, along with the next generation of rising stars, provide a balanced mix of large institutional-quality organisations and smaller boutiques.
The platform uses an open-architecture business model, an important feature when counterparty risk is top of investors’ minds. It uses 11 prime brokers, three independent fund administrators and 15 authorised OTC derivative counterparties. “Such things were appreciated in particular last year by our institutional investors, who rely on solid risk guidelines,” Keller says. “In volatile markets this rigorous approach equates to better protection of clients’ capital.”
Last year also saw Lyxor introduce multistrategy funds to the platform, further underscoring its reputation as an industry leader. “This represents a new frontier for the industry, as you must master various technological and legal challenges to replicate such complex strategies in a managed account framework,” Keller says.
Lyxor’s risk management framework is based on three primary sources: selection risk, operational risk and market risk. With respect to the latter, the platform’s transparency is used to control style drift, tail risk and extreme market risk. Customised investment guidelines in areas such as leverage, liquidity and options allow managers dovetailing their strategy into a managed account format to pre-define the level of risk. In 2011, a new customised and dedicated online environment was launched to enhance transparency for professional investors.
The web site allows investors to manage their portfolios actively. Says Keller: “They can track their investments with access to an extensive set of risk and performance indicators within a totally secure, confidential framework. The service specifically responds to investors’ key decision criteria: security, transparency, risk management and liquidity.”
On winning the Hedgeweek award, Ingrid Martin (pictured), deputy head of Lyxor MAP, says: “We are honoured to get this recognition for the third year running, especially because it comes from a global reader survey. We would like to share this award with our investors and business partners worldwide, who have trusted us for 13 years.”
