The Gemini Companies (Gemini) has shared insights (via a recording) from a recent Gemini-hosted event in Boston that demonstrated how its DMA structure may provide significant savings over traditional multi-fund structures. During the event, Susan Barreto, Editor at Large for HFM Global, interviewed David Young, President of Gemini’s Hedge/Alt Solutions, who provided concise examples of clients realizing these quantifiable savings.
Young walked the audience of senior fund industry executives through a DMA. He explained how the DMA’s capacity can allow the asset owner and investment manager to negotiate strategy guidelines and management and performance fees to result in meaningful long-term impact on the bottom line (see illustrative* below).
|
Assets Under Management |
Basis Points Saved with a DMA |
Structural Alpha Saved (assuming 100 bps savings) |
Structural Alpha Saved over a three-year Period |
|
USD250m |
10-150 bp |
USD2.5m |
USD7.5m |
|
USD500m |
USD5.0m |
USD15.0m |
|
|
USD750m |
USD7.5m |
USD22.5m |
“Many OCIOs feel a deep sense of responsibility to distribute returns to investors,” Barreto commented during the interview. “Having a structure that allows them to amplify results is important.”
Young added: “It is gratifying that our DMA structure helps pensions, consultants, endowments, family offices, and OCIOs keep the promises they made and achieve a clear competitive advantage. The DMA is helping reduce the overall cost of investing for asset owners, thereby helping generate better returns for their constituents.”
How Gemini’s DMA structure helps the end investor:
- Reduced operating expenses
- Lower manager minimums than would be required of a direct relationship
- Better liquidity terms
- Trade-level data for greater transparency/reporting
- Third-party guideline monitoring
- Electronic subscriptions (e.g., ease of allocation changes, single K-1, and single sub-docs
To Learn More:
LISTEN to the panel.
DISCOVER how Gemini clients are achieving Structural Alpha.
EXPLORE Dedicated Managed Account Solutions.
