Elana Margulies

09/06/2010 Author: Elana Margulies

Family offices still wary of lock-ups

Family offices are at last following institutional investors into the realm of Ucits and managed accounts. This week, Parly Company and the Dhandsa Family Office joined the growing fray, by respectively announcing plans to transition assets from hedge funds into managed account structures and Ucits offerings.

However, like all fads, it seems that two of the latest investment trends are not a solution for all. At this week's Opal Financial Group European Family Office & Private Wealth Management Forum in Switzerland, panelists debated the merits of these structures.

Tushar Patel, senior advisor, Dhandsa Family Office, was one speaker who suggested that managed accounts and Ucits are not a panacea. “Pure traditional allocators may still be happy with the old model,” he said.

Patel reasoned that for families to reap the full benefits of managed account structures, managers need a strong operational platform and an adequate skill set. While Ucits, despite the current gold-rush mentality surrounding them, were not immune from side-pockets or having investments suspended.

And with May’s figures looking shaky, “lock-up is a dirty word right now,” said Carol Pepper, president at Pepper International, a multi-family office in New York. Making the serious point that family offices – still scarred after 2008 – are unlikely to commit to any fund with the potential for gates, regardless of structural stripe

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