The Hedge Fund Law Report

The definitive source of actionable intelligence on hedge fund law and regulation

Articles By Topic

By Topic: Managed Account Platforms

  • From Vol. 5 No.31 (Aug. 9, 2012)

    Considerations for Hedge Fund Managers Looking to Join Managed Account Platforms (Part Two of Two)

    While hedge fund investors are principally concerned with generating returns on their capital, they have become increasingly concerned with protection of their capital, which has led to a rise in the popularity of managed accounts.  In contrast to commingled funds, managed accounts generally offer investors enhanced liquidity, transparency and control over their assets.  However, with the desire for exposure to various investment strategies and fund managers as well as the onerous cost of establishing stand-alone managed accounts, many hedge fund investors are turning to managed account platforms, which offer a cost-effective method of gaining exposure to myriad managers and strategies.  Additionally, many hedge fund managers have realized that there are benefits to offering their services through managed account platforms over and above the additional capital they can raise from investors.  This is the second article in a two-part series designed to describe what managed account platforms are and to highlight the considerations that managers should evaluate in determining whether to offer their services through such platforms.  This article covers: the three principal advantages of managed accounts versus commingled funds; the seven chief advantages of managed account platforms over stand-alone managed accounts; considerations for hedge fund managers evaluating whether to offer their services through a managed account platform; how managers should consider which platforms to join; and seven key issues for managers to negotiate with platform sponsors before joining a platform.  The first article in the series surveyed managed account platforms, describing the various structures used for platforms, the evolution of platforms and the process for adding a manager to a platform.  See “Considerations for Hedge Fund Managers Looking to Join Managed Account Platforms (Part One of Two),” The Hedge Fund Law Report, Vol. 5, No. 30 (Aug. 2, 2012).

    Read Full Article …
  • From Vol. 5 No.30 (Aug. 2, 2012)

    Considerations for Hedge Fund Managers Looking to Join Managed Account Platforms (Part One of Two)

    Following the 2008 financial crisis, hedge fund investors expressed concerns relating to a lack of liquidity, transparency and control in investing in comingled funds.  This led to an increase in the popularity of separately managed accounts, which address these concerns while allowing investors to access the investment acumen of talented hedge fund managers.  Capitalizing on the popularity of managed accounts, financial institution sponsors have built managed account platforms that provide investors with access to a variety of managers.  The platform sponsor vets participating managers, serves as a gatekeeper of the platform and provides other services.  These managed account platforms have grown in popularity, particularly with institutional investors.  As such, many hedge fund managers have considered joining such platforms as a route to increased assets under management and visibility in the institutional investor community.  This is the first article in a two-part series designed to describe what managed account platforms are and to highlight the various considerations that hedge fund managers should evaluate in determining whether to offer their services through such platforms.  This first article surveys managed account platforms, including describing the various structures for managed account platforms; the evolution of managed account platforms; and the process for adding a hedge fund manager to a managed account platform.  The second article in the series will discuss why investors find managed account platforms attractive as a method for allocating capital; considerations for hedge fund managers evaluating whether to offer their services through a managed account platform; how managers should consider which platforms to join; and certain key issues to negotiate with a platform sponsor.

    Read Full Article …