Performance is a combination of intelligent investing and operational effectiveness
This is not necessarily a happy time for many hedge fund managers. Volatile markets have exposed the failings of a number of investment strategies and left many funds concerned about where they might find their financing. But these worries are really only the beginning. Even before the recent market turmoil, it was becoming apparent the industry itself was being re-engineered. Investors may be wary of today’s markets, but they accept the risk as the cost of doing business. What is unacceptable is operational risk: the risk that investments are in jeopardy because a fund manger can not run itself effectively.
Hedge funds have grown from a community of mainly small privately-owned businesses into larger, more complex organisations. Along the way, the importance of robust operational platforms has become ever more obvious. For hedge fund managers, the question is...