Providers of managed account platforms are reporting a “spike” in enquiries in the past month as hedge fund investors scramble for a safer way of investing in an asset class that suddenly looks more like a minefield. (PDF)
The sorry Bernard Madoff saga, and a number of smaller alleged frauds that have since emerged from the woodwork, have shone a light on the dangers of allowing lightly regulated managers to hold assets in a manner that cannot be verified by outside observers.
And even before Bernie’s face leapt from every newspaper front page, many hedge fund investors were growing increasingly concerned about the lock-ups, gates, redemption suspensions and side-pockets implemented by many funds to stem the tide of redemptions.
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