Progress report
An assessment of hedge fund YTD performance in the face of renewed fears for a potential eurozone crash Read More
30/03/2011
Managers have work to do to secure investment
The signs are undoubtedly good. Investor interest is returning, performance is improving and total assets are within touching distance of the all-important $2trn mark: all in all, 2011 looks set to be a positive year for the hedge fund industry.
But any hedge fund manager expecting to simply sit back and watch the capital come pouring in may be disappointed, because for every institution eager to dip its toe in the hedge fund pool, there’s another still holding on to preconceived notions about the sector (some accurate, some not), which will prevent them from even considering an allocation.
Speaking at the HFMWeek’s UK Breakfast Briefing last week, Hans Hufschmid, CEO of GlobeOp Financial Services, stated that investors have “zero-tolerance” for operational risk post-Madoff, emphasising the importance of transparency, operational due diligence and data reporting in an industry increasingly populated by large, demanding institutional investors.
Those hedge fund managers struggling to attract crucial big-ticket investments may want to consider if the steps they have taken have gone far enough. Guy Saintfiet, UK head of liquid alternatives at Aon Hewitt, told the Breakfast Briefing audience that the consulting firm would not even consider including a manager on its ‘approved list’ if they did not have full position transparency on their whole portfolio.
And size still matters. While allocations to small- to mid-sized managers are expected to increase in 2011 (see news, p5), a lot of the larger pension and endowment funds are still wary of being a big fish in a small fund. For many, investing in funds above $1bn is, for now at least, the favoured approachThe signs are undoubtedly good. Investor interest is returning, performance is improving and total assets are within touching distance of the all-important $2trn mark: all in all, 2011 looks set to be a positive year for the hedge fund industry.
But any hedge fund manager expecting to simply sit back and watch the capital come pouring in may be disappointed, because for every institution eager to dip its toe in the hedge fund pool, there’s another still holding on to preconceived notions about the sector (some accurate, some not), which will prevent them from even considering an allocation.
Speaking at the HFMWeek’s UK Breakfast Briefing last week, Hans Hufschmid, CEO of GlobeOp Financial Services, stated that investors have “zero-tolerance” for operational risk post-Madoff, emphasising the importance of transparency, operational due diligence and data reporting in an industry increasingly populated by large, demanding institutional investors.
Those hedge fund managers struggling to attract crucial big-ticket investments may want to consider if the steps they have taken have gone far enough. Guy Saintfiet, UK head of liquid alternatives at Aon Hewitt, told the Breakfast Briefing audience that the consulting firm would not even consider including a manager on its ‘approved list’ if they did not have full position transparency on their whole portfolio.
And size still matters. While allocations to small- to mid-sized managers are expected to increase in 2011 (see news, p5), a lot of the larger pension and endowment funds are still wary of being a big fish in a small fund. For many, investing in funds above $1bn is, for now at least, the favoured approach.
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60 seconds with... Kenneth Turchin
CAN YOU DESCRIBE YOUR CURRENT ROLE?
I have worked in public accounting and hedge funds and in the past eight years have been selling middle- and back-office services to the alternate investment industry. My role is to build relationships with clients, teach them about SS&C’s products and services, and ensure seamless transactions every time the firm launches a new fund.
IF YOU WERE DOWN TO YOUR LAST £1,000, HOW WOULD YOU INVEST IT?
I would buy THREE shares in Apple and hope for a repeat 383% return in the next five years.
WHAT WOULD YOU DO IF YOU WERE IN PRESIDENT OBAMA’S SHOES?
That’s one pair of size 12 shoes I do not want to be in!
WHO WOULD PLAY YOU IF THEY MADE A MOVIE ABOUT YOUR FIRM?
Kevin Bacon. He is a versatile actor and the centre of the entertainment universe. I am in sales. Everyone in the industry would be linked to me in six steps or less. My client list would be ridiculous.
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