A shift in the balance of power
The way in which managed accounts are negotiated, structured and administered on a day-to-day basis is a telling indication of the shift in the balance of power between investors and single hedge funds that has gathered pace over the past 12-18 months.
Underlying the relationship between investors and hedge fund managers is an insistence that the underlying managers focus exclusively on what they do best - which is (or should be) generating alpha. "We manage the administration and control of cash and securities," says Perkins, at Lighthouse Investment Partners in Florida. "All we're asking our managers to do is trade and generate returns."
Tony Gannon, Abbey Capital and Kelly Perkins, Lighthouse Investment Partners
Investors have plenty of tools at their disposal to ensure that their managers do exactly what they are instructed to do. Their chief mechanism is the Investment Advisory Agreement signed...