Last year, hedge funds recorded positive returns during every month to end the year with gains of 11.41 per cent according to the 2018 Preqin Global Hedge Fund Outlook report.
For HedgeMark, a BNY Mellon company, this was particularly pleasing as institutional investors, particularly fund-of-fund managers, continued to adopt the use of dedicated managed account structures to optimise their hedge fund investment programmes; something that HedgeMark excels in with its Dedicated Managed Account solution.
“We also saw an increase in demand from the public pension space and we would expect to see a number of plans begin to build out their own dedicated managed account platforms in 2018,” remarks Andrew Lapkin, CEO of HedgeMark.
During 2017, HedgeMark added more than USD4.6 billion in platform assets and launched 36 funds; the highest annual number since its inception.
HedgeMark is regarded as a pure play dedicated managed account provider, in that it assists clients in setting up and operating their own private managed account platforms. “We build and operate private platforms for our clients, independent of the hedge fund managers. The role of the managers is limited to trading the portfolio,” explains Lapkin.
He says that the key to HedgeMark’s ability to offer a turnkey outsourced MAP solution starts with the expertise and experience of its team to support the broad range of services required to operate a platform.
“We have built a team led by experienced industry veterans across various disciplines including structuring, onboarding, operations, accounting, risk and technology.
“The second critical element is built-for-purpose technology, which provides our staff with an efficient and controlled means by which to deliver the necessary services to our clients. This technology has been key to our ability to perform successfully, both in terms of service delivery as well as client reporting,” explains Joshua Kestler, President and COO, HedgeMark.
A third key component to providing bespoke MAP solutions to institutions is the ability to accommodate increasing scale. As platforms grow and take on an increasing number of complex institutional clients, they will need to find ways to continue to efficiently deliver quality service.
“We have made an investment in both people and technology in an effort to ensure that we have a scalable model which can accommodate a large amount of growth over time,” asserts Lapkin.
HedgeMark has handled operationally complex strategies on the platform since day one. This has allowed it to develop a team, processes, and proprietary technology to handle a wide range of strategies today, as alternative risk premia funds, bank loan funds and AI-driven funds become favoured by investors. Kestler confirms that the operations system used by HedgeMark staff to perform daily functions such as reconciliations, collateral management and collateral optimisation, OTC lifecycle management and NAV reviews, “is a unique differentiator of the HedgeMark platform”.
When asked to describe the internal culture, Lapkin talks about the entrepreneurial spirit within the core team that has built the HedgeMark platform from the ground up.
“As a BNY Mellon company, we think that we offer clients the best of both worlds – we provide the feel of an entrepreneurial boutique in terms of the high touch nature of our client service while also offering the benefits of the stability, controls and resources of a large, global financial institution,” comments Lapkin.
On winning this year’s award, he states: “We are honoured to receive the Hedgeweek award for Best Managed Account Platform for the 4th straight year. I believe that this recognition is a testament to the efforts and client service delivered by our team.”
