05/06/2006

Survey 'likely' to confirm rise in cash holdings

NEW YORK: A best practices survey being carried out be US-based Horizon Cash Management is likely to confirm rising quantities of cash being held by hedge funds, according to the firm.

The survey may also throw up other surprises, Brian Hurley, senior director of marketing said, such as the large number of managers who have avoided SEC registration.

The survey, which is open to all hedge fund industry professionals, will close towards the end of June. Questions in it include: do you have a succession management plan; are you a registered investment adviser; and do you have soft dollar arrangements with prime brokers/ clearing firms?

It is the third research project Horizon has commissioned since 1998 and was designed to provide an examination of where industry best practices currently stand across a broad spectrum of investment and operational realms. Each respondent will be able to compare and contrast his or her own best practices against those of others. So far there have been more than 200 responses to the survey.

The survey is likely to confirm a trend for growing cash positions, Hurley told HFMWeek. "It has always been a figure greater than the market place thinks," he said. "It can be as high as 20% to 25%."

Growing cash positions could be the result of an increasingly crowded market place, according to Hurley.

"I suspect that one or two of the best practices we ask people about are not being as broadly implemented as governments or regulatory bodies expect, for example hedge funds being registered," he added.

Hedge fund professionals can fill out the survey online at http://asking.yourthoughts.com (password: hedge).

Established in 1991, Chicago-based Horizon Cash Management provides customised portfolio and treasury services to hedge funds, managed futures funds and other institutional clients worldwide. With more than $3bn in assets under management, Horizon seeks to maximise cash balance returns while providing daily risk management for alternative fund investors and managers.