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Hedge fund managers often argue that taking on separately managed accounts can place an additional operational burden on their teams. As a result, many managers may resist investor requests for managed accounts.
A new breed of outsourced managed account solutions now exist which allow institutional investors to build their own private platforms while also reducing the operational burden on hedge fund managers. One of the leaders in this field is HedgeMark with its Dedicated Managed Account solution.
“We build and operate private platforms for our clients, independent of the hedge fund managers. The role of the managers is limited to
There are a number of different reasons for why investors wish to allocate to emerging managers. They might be looking for more performance from emerging managers because they are less constrained by overcrowded trades in the markets, or simply wish to gain exposure to more interesting, niche strategies that few others are looking at. Whatever the reasons, using separately managed accounts are one of the most effective tools for institutional investors. And a way to break free of the shackles of investing purely in blue chip names.
If large institutions concentrate too many of their assets among the same universe
It is fair to say that Sigma Analysis & Management, based in Toronto, takes a uniquely quant-focused approach to the way it operates managed accounts. Founded in 1999 by Professor Luis Seco, director of the Masters of Mathematical Finance programme at University of Toronto and RiskLab, and David Rudd, past Chair of the Montreal Exchange Futures Committee, Sigma was designed to assist Canadian public pensions in analysing their hedge fund investments.
Originally based in the Fields Institute for Research in Mathematical Sciences, and comprised of a team of individuals with PhDs in physics, math and computer science, Sigma has grown
There is often a natural gap between the risk profiles that hedge funds want to produce, and what institutional clients want to buy. As such, there can be a different psychological view as to what a hedge fund represents to the manager and to the investor. An investor running a diversified portfolio may want much greater risk in the individual underlying funds than a hedge fund manager wants to run in his own business.
This constitutes a gap in the utility function and the appetite for risk, which can be hard to close without using managed accounts.
Sam Thompson is head
LumX Group Limited (LumX), who has been developing and managing alternative investment programmes for over 25 years, is in the process of redomiciling the LumMap managed account platform, from Jersey to Ireland.
The purpose of this is to extend the platform’s capabilities such that funds on the platform are AIFMD-compliant and can be freely distributed and marketed to investors in the EU.
“The platform originated from our requirements as an asset manager,” explains Eric Bissonnier (pictured), CIO, Alternative Solutions, LumX Asset Management. “The aim was to better manage risks that are harder to control in a commingled fund format. If we
Next year, Lyxor Asset Management, one of Europe’s leading managed account platform providers, celebrates its 20th anniversary. Over that time, it has seen, and responded to, changing market dynamics. More recently, this has meant focusing on building out a larger range of liquid, regulated alternative UCITS funds on the Lyxor Alternative UCITS platform.
Offshore commingled and dedicated funds still dominate the Lyxor MAP, in terms of AUM (EUR13 billion), but the compass bearing has changed with respect to future evolution.
As Daniele Spada (pictured), Head of Lyxor MAP, explains: “Four years ago, the bulk of our managed accounts were a
With market volatility always top of investors’ minds, the ability to assume greater control over a particular investment strategy using a managed account structure has grown in significance in the last few years. With markets due a correction, and investors keen to optimise the way they allocate to hedge fund strategies, taking a customised approach – as opposed to necessarily using commingled managed account platforms or `public’ platforms – continues to resonate.
This is playing to the strengths of dedicated platform operators, with the infrastructure expertise needed to meet individual client demands.
A custom mandate enables investors to build out
A subset of structured products traded on the fixed income markets of Nasdaq Helsinki and Nasdaq Stockholm in Genium INET have been classified as securitised derivatives in accordance with MiFIR and MiFID II.
The products in question are leverage certificates such as market warrants. MiFIR stipulates that transactions in securitised derivatives must be cleared by a CCP when traded on a regulated market. As a consequence, the instruments will be transferred to the multilateral trading facility Nasdaq First North, operated by Nasdaq Nordic on 18 December, 2017.
Nasdaq Nordic has published a new rulebook that covers securitised derivatives traded in Genium
Man Group has appointed Charmian Wan as Managing Director within its institutional sales team in Hong Kong.
Reporting to Hersh Gandhi, Managing Director, Asia-Pacific at Man Group, Wan (pictured), will focus on Man Group’s institutional client business across Asia, encompassing the firm’s five investment managers, Man AHL, Man Numeric, Man GLG, Man FRM and Man Global Private Markets.
Wan has over 17 years’ experience in the financial services industry. She joins Man Group from Lazard Asset Management, where she was Director, Head of Business Development and Marketing, Asia ex-Japan. She previously held roles at BlueBay Asset Management as Head
Technology is playing a pivotal role in how fund administrators support the growing reporting needs of private equity (PE) groups. Those who have both the internal experience to handle PE funds and the technological capability to deliver effective services and reporting, are likely to be the best positioned; especially as more PE groups appoint trusted third party service providers.
The push toward using third party administrators is largely institutional-driven. As investors look to diversify their portfolios, they expect reporting from PE groups to be similar to the reports received from hedge fund managers.
“Increasingly, PE managers are choosing to not
