White Papers

The Institutionalisation of Hedge Funds: The Investor Due Diligence Bar Rises Ever Higher
Feb 04, 2011

6f397413-da5a-491d-81d9-7bc9c1bbb8e4_Chapel1.jpg The institutionalisation of hedge funds has been driven by a number of factors over the past two years. The pain suffered by investors following the collapse of Lehman Brothers (“Lehman”) and Bernard Madoff’s ponzi scheme, preceded a market collapse which decimated many institutions and hedge funds.

Alternative Managed Accounts: Opportunities in Fund Administration
Feb 04, 2011

e2da1c44-f99d-4c2b-80f1-4a5fb6c37017_Advent1.jpg Institutional investors are steering more and more of their alternative investments from hedge funds to managed accounts, posing a new and potentially lucrative opportunity for fund administrators. Administering a multiple managed account platform is beyond the core competency of the vast majority of institutions, and they are looking for help. Administrators that can successfully leverage their infrastructure and adapt their skills to the needs of institutional investors will have the opportunity to expand their business into a whole new market beyond hedge funds.

The importance of independent valuation for OTC derivatives under UCITS
Jan 24, 2011

10e99163-3e14-4a41-bacf-bf3602859cfc_Sungard1.jpg Asset managers investing in OTC derivatives within a UCITS fund structure must now source independent valuations in order to meet the demands of regulators and ease the concerns of their investors. SunGard outlines the benefit of independent valuations and what asset managers should look for when scouring the market for a suitable valuations provider.

Mitigating Collateral Damage
Jan 24, 2011

12bbf040-b64a-4a6b-89f2-2b682693a32f_BNY-Mellon1.jpg Current themes in managing and mitigating counterparty credit risk for OTC derivatives. Buy-side institutions face significant gaps in being able to accommodate the regulatory requirements emerging in the US and Europe, according to a BNY Mellon survey of institutional investors released today. Surveyed during the latter part of 2010, the research establishes how these institutions are addressing the challenges of counterparty credit risk and collateral management for OTC derivatives.

Institutional Hedge Fund Investing Comes of Age
Jan 21, 2011

1c903882-0081-46ec-a29e-3ef79f837353_SEI1.jpg Having come through two tumultuous years, institutional investors say their commitment to hedge funds is intact. But they are operating with a heightened awareness of risks and actively applying the lessons recently learned.

Commingled Hedge Funds – What Are the Alternatives?
Jan 17, 2011

5ada69b1-3863-4c13-a164-9f6dc3536937_WP-Large-Image-2223.jpg Traditional commingled investments in hedge funds remain favourable to institutional investors, but following the market turmoil, other fund structures such as Ucits-compliant funds and managed accounts have gained investor traction. This paper investigates which institutional investors seek investments in Ucits-compliant funds, how much investors allocate to the various fund types and which traditional fund structure is the most popular amongst investors.

The AIFM Directive: A Preqin Special Report
Dec 15, 2010

a95c0490-3e00-4056-83e4-241ad692985a_AIFMDirective-1big.jpg A Preqin survey of over 100 alternative assets fund managers and investors found that just under a third support the AIFM Directive to some extent, with firms in certain countries where the new legislation will replace more restrictive existing rules believing that it will serve to improve conditions. However, for the majority there exists significant resentment towards the Directive.

The Allure of Emerging Managers
Dec 14, 2010

9b387302-18ba-4811-92ef-73a7420306fc_PreqinHedgeFundSpotlightDec2010-1BIG.jpg The latest Preqin survey shows that the number of hedge fund investors expressing an interest in seed investments has almost doubled, from 11% in 2009 to 21% in 2010. Investors feel that the benefits of investing in these funds, such as fund ownership, fee negotiations and early access to the next generation of hedge funds, far outweigh the disadvantages in the current climate. Seed investments are also evolving post-crisis, as investors award seed capital to more established vehicles that may have encountered fundraising difficulties or lost assets through the crisis.

Hedge Fund Maturity Model
Dec 13, 2010

ff6b594f-7515-4a7c-9e25-a04ac50b0d5e_CitiPrimeFinanceQ42010Whitepaper-1.jpg This "Hedge Fund Maturity Model" whitepaper takes a best practices approach and lays out a framework and taxonomy for discussing hedge fund evolution. This work is based on detailed analysis and benchmarking of the different types of funds that exist in the new landscape. It attempts to highlight the key organisational, operational and technology transitions that take place at different stages of a firm's development and provides a template for understanding the inner workings of a manager as AUM grows and as the firm's scale of operations advances. Citi Prime Finance's Business Advisory team has based this model on a comprehensive profiling exercise. This maturity model will become the foundation for its new full range of business advisory services covering management consulting, operational consulting, start-up services, and technology consulting.

From black box to open book: Hedge fund trust and transparency
Nov 22, 2010

2465e2a4-0cd2-42b8-a565-69010cd82788_Transperancy.jpg Hedge funds need to be more transparent if they are to win institutional investors’ favour for asset allocations over the traditional investment management industry, according to a report by PricewaterhouseCoopers (PwC). The survey, ‘Hedge fund trust and transparency: From black box to open book’ revealed that as hedge funds become more mainstream, institutional investors are demanding greater transparency into their governance and operational structures in order to rebuild and retain trust in managers.

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