The Gemini Companies (Gemini) today released findings from its recent webinar featuring industry experts discussing the trends in institutional investing and the value of managed account platforms. The webinar, “Managed Account Platforms: The Evolution of Hedge Fund Investing,” was moderated by James Williams, editor of Hedgeweek.
During the event, Gemini polled investors and senior fund managers, revealing that 33% currently use some type of platform for manager allocations. Participants also responded about the benefits they found most valuable about managed account platforms, with manager oversight being their first choice (46%), followed by transparency of portfolio holdings (31%), aggregated risk reporting (15%), and liquidity (8%).
Edward Lund, Gemini’s Senior Vice President of Business Development for Institutional Sales, commented, “The data shows that the industry is just now starting to reap the full impact of managed account platforms. These platforms allow institutions to allocate to dozens of managers, providing greater diversification without the need for significant internal resources. They also provide an efficient and cost effective way for institutions to implement a fund of hedge funds model.”
Other benefits of a managed account platform revealed during the event include:
- Access to managers at lower minimums than would be required of a direct relationship
- Better liquidity terms than is typical of a direct relationship
- Full transparency (trade-level data)
- Guideline monitoring provided by a third-party
- Convenience – electronic subscription, ease of allocation changes, single K-1, and single sub-doc
James Williams, editor of Hedgeweek, noted, “With institutional investors searching for the most efficient way to optimize their exposure to hedge funds, many are discovering the myriad of benefits to using managed account platforms. Not only do they facilitate greater cash efficiency by accessing trading strategies on margin, as opposed to being fully funded in offshore structures, they give investors the chance to tailor their exposure and dial up risk. In a continued low rate environment, that is an advantage and one that looks set to support further evolution of the managed account platform model.”
Registrants were also asked what type of investments they currently allocate to, with equities being the top (80%), followed by commodities (57%), private equity (57%), and fixed income (50%).
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About the Gemini Companies
The Gemini Companies empower financial institutions with the operational and distribution infrastructure they need to bring their pooled investment products to market. We work alongside financial institutions and investors as engaged partners to challenge the status quo and identify innovative solutions to help them grow and succeed.
The Gemini Companies are composed of subsidiaries of NorthStar Financial Services Group, LLC, which has 850 employees and over $685 billion* in assets under management. For more information, please visit www.thegeminicompanies.com.
This release is for informational and discussion purposes only. Alternative investment products, including hedge funds and managed futures, involve a high degree of risk and are not suitable for all investors.
*as of October 31, 2017