{"id":15648,"date":"2010-05-14T07:30:21","date_gmt":"2010-05-14T11:30:21","guid":{"rendered":"http:\/\/www.hedgeco.net\/news\/?p=15648"},"modified":"2010-05-14T07:37:16","modified_gmt":"2010-05-14T11:37:16","slug":"hedge-fund-industry-trends-highlights","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/05\/2010\/hedge-fund-industry-trends-highlights.html","title":{"rendered":"Milken Institute: Hedge Fund Industry Trends"},"content":{"rendered":"<p><a href=\"http:\/\/www.hedgeco.net\/news\/wp-content\/uploads\/2010\/05\/img_54671.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignleft size-medium wp-image-15653\" title=\"Milken Institute Global Conference\" src=\"http:\/\/www.hedgeco.net\/news\/wp-content\/uploads\/2010\/05\/img_54671-300x203.jpg\" alt=\"\" width=\"187\" height=\"126\" srcset=\"https:\/\/hedgeco.net\/news\/wp-content\/uploads\/2010\/05\/img_54671-300x203.jpg 300w, https:\/\/hedgeco.net\/news\/wp-content\/uploads\/2010\/05\/img_54671-1023x694.jpg 1023w\" sizes=\"auto, (max-width: 187px) 100vw, 187px\" \/><\/a>New York (HedgeCo.net) \u2013 Investor due diligence, managed accounts,   the role of large hedge  funds, and return expectations were industry  trends highlighted by Hans  Hufschmid, CEO, GlobeOp Financial Services  at the Milken Institute  Global Conference held in Los Angeles, CA.<\/p>\n<p>Hufschmid\u2019s panel \u2013  which also included executives from Albourne  America, Coventry, The  Ewing Marion Kauffman Foundation, The J. Paul  Getty Trust and Skybridge  Capital \u2013 debated the evolving world of  alternative investments.<\/p>\n<p><strong>Highlights from Hufschmid\u2019s comments include:<\/strong><\/p>\n<ul>\n<li>Credit exposure became a  major issue post-Lehman Brothers. That  event meant hedge funds could not  only lose money through markets, or a  fraudulent manager, but also by  having exposure to bad credit. Clearly  investors are now focusing on who  the fund is doing business with,  what that counterparty credit exposure  is, and how it\u2019s managed.<\/li>\n<\/ul>\n<p><strong>Managed Accounts<\/strong><\/p>\n<ul>\n<li> When you invest  there is a great deal of operational due diligence  required up front, in  addition to analyzing the trading strategy and  its merits.<\/li>\n<\/ul>\n<ul>\n<li>Until Madoff brought this to the fore in 2008, investors typically  asked  how returns were performing and whether strategies were adhered  to.  Then the key question became, \u201cAre the assets actually there?\u201d That  is  very important \u2013 everything else is moot if assets disappear  through  fraud.<\/li>\n<\/ul>\n<ul>\n<li>We see many large institutional investors working  seriously to  convert their fund investments to managed accounts. And 1.5  years after  Madoff they\u2019re still not up and running \u2013 that shows the  complexities  involved.<\/li>\n<\/ul>\n<ul>\n<li>For managers it\u2019s also additional work  to proportionally allocate  trades to a separate account as well as to  the main fund.<\/li>\n<\/ul>\n<p><strong>The important role of large hedge funds<\/strong><\/p>\n<ul>\n<li>Smaller hedge funds are generally more nimble. Research suggests  that in  their first three years, hedge funds actually outperform \u2013 or  at least  these tend to be their best three years in business. However,  if that\u2019s  really the premise of investing in hedge funds, we don\u2019t have  an industry.  A large institution doesn\u2019t have the infrastructure or  the time to  invest $20 million per fund in 100 different funds.<\/li>\n<\/ul>\n<ul>\n<li>Large funds  probably have a competitive advantage in risk  management, in  infrastructure and in the investor base they service.<\/li>\n<\/ul>\n<p><strong>Hedge fund  returns in a de-levered environment<\/strong><\/p>\n<ul>\n<li>I object to a fund saying it  will produce 8 or 10% returns, because  that is a function of what the  equity markets are doing and where  interest rates are.<\/li>\n<\/ul>\n<ul>\n<li>When  hedge funds started in the \u201980s and early \u201990s, the primary  investors  were wealthy individuals, who invested because the leading  funds  generated 30% returns. But it was 30% because the equity market  at the  time generated 20% returns.<\/li>\n<\/ul>\n<ul>\n<li>Now we\u2019ve had a decade of zero  growth in the equity market and I  would expect hedge funds to outperform  the risk-free rate by 3-6%. So a  5-8% return has become an acceptable  return for a hedge fund.<\/li>\n<\/ul>\n<p>Established in 2000, GlobeOp  represents $115 billion in assets under  administration (AuA). With  headquarters in London and New York,  offices are also located in Dublin,  Ireland; George Town, Cayman  Islands; Harrison and Yorktown Heights, NY  and Hartford, CT, U.S.A.;  and Mumbai (Bombay), India.<\/p>\n<p>Editing by Alex Akesson <br \/>For <a title=\"hedge funds\" href=\"http:\/\/www.hedgeco.net\">HedgeCo.net<\/a><br \/>\n<a href=\"mailto:alex@hedgeco.net\">alex@hedgeco.net<\/a><br \/>\n<a title=\"hedge fund\" href=\"http:\/\/www.hedgeco.net\">HedgeCo.Net<\/a> is a premier <a title=\"hedge fund database\" href=\"http:\/\/www.hedgeco.net\">hedge fund database<\/a> and community for qualified and accredited investors only. Membership in <a title=\"hedge fund\" href=\"http:\/\/www.hedgeco.net\">HedgeCo.net<\/a> is FREE and EASY. We also offer FREE LISTINGS for <a title=\"hedge fund\" href=\"http:\/\/www.hedgeco.net\">Hedge Funds<\/a>!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>New York (HedgeCo.net) \u2013 Investor due diligence, managed accounts, the role of large hedge funds, and return expectations were industry trends highlighted by Hans Hufschmid, CEO, GlobeOp Financial Services at the Milken Institute Global Conference held in Los Angeles, CA. [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12,3],"tags":[],"class_list":["post-15648","post","type-post","status-publish","format-standard","hentry","category-hedge-fund-regulation","category-hedgeco-news"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/15648","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=15648"}],"version-history":[{"count":6,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/15648\/revisions"}],"predecessor-version":[{"id":15656,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/15648\/revisions\/15656"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=15648"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=15648"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=15648"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}