Financial Services:
Alternative Investments |
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The hedge fund market has been undergoing significant change over the last 12 months, which has increased the industry’s focus on transparency, cost and risk controls and optimising fund ranges. How should fund managers respond to current challenges?
As we face an economic downturn, the key focal points will be: |
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1. Fund Range Review. If you’re a hedge fund manager, you’ll probably have seen some redemptions caused by clients de-leveraging, even if performance is okay. Some funds may have become “sub-scale”, others may have closed to redemptions, while others may still be suffering from illiquid assets and the risk of “fire sale” prices. So now is a good time to review – and not just individual funds, but your entire range:
What can be done to utilise the strengths that are there? How can smaller funds and fees avoid significant losses? And how can you rationalise the platform to reduce costs? |
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2. Operating Control and Risk Management. Regulators and clients will be paying increased attention to operational controls and risk management across the whole hedge fund industry. So how do you make sure your operations are in a state to benefit from further scrutiny?
Frameworks from industry best practice, Hedge Fund Standards Boards and Presidents Working Groups can act as a useful guide, showing how you’ll need to look to compete in a future that pays as much attention to your operating controls as your trading strategies. |
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3. Fund Launch. It might not seem like the right time to bring a new product to market, but if you have a slick, well-structured product development process, there are opportunities out there that can be exploited. Even with seed capital scarce on the ground, launching or incubating funds now could give you an edge over the competition further down the line when you want to target clients more actively.
Time to market is a key profit-generator over the life of a product and ensuring that the right funds are in place at the right time will yield significant results during this volatile period.
If your organisation is facing any or all of these issues, FusionExperience has the knowledge and expertise to help. We make it our business to know what your future challenges will be, so we can provide the most relevant and innovative solutions. |
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