DGAM mixes a cocktail of idiosyncratic risks and good old hedge funds

Thu Mar 3, 2011



Diversified Global Asset Management stocks up on tail hedging in its risk management arsenal


By Claire Makin

David Hay, George Main, Lindsay Holtz, Warren Wright, and Ryan Barry

Most fund of fund managers avoid innovative strategies on the grounds that they are too risky, and may have limits to growth. But Diversified Global Asset Management believes that risks may be responsibly managed if they are understood, and sees ample growth potential in the sector. "Most of these strategies are marginalised because they're complex, not because they're constrained," says George Main, chief executive officer of the Toronto and New York-based firm.

For managers who can handle the complexity - and DGAM counts itself among them - emerging strategies are where investors can often reap the richest rewards, according to Main and his team. Some of them, such as pharmaceutical royalties or commercial litigation financing, are hard for investors to access and require specialist knowledge.

Although DGAM is known for its focus on 'idiosyncratic' risks, it is...

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