Chidem Kurdas
Separately managed accounts looked like the way to avoid unexpected suspensions of redemption as happened in the 2008 crisis, as well as rip-offs. Separate accounts, unlike shares in a fund, remain in the investor’s control. But there are downsides, both for managers and their clients. You hear more about the negatives now.
John Phinney Jr., chief operating officer of Apollo Capital Markets, says managed accounts have unintended (more…)
Chidem Kurdas
Fund clients are showing greater concern about fellow clients. This is a consequence of the redemption frenzy of 2008-2009, when some investors withdrew from funds in a bad market because they had an urgent need for money, often to meet margin calls. This forced funds to sell at losses that could have been avoided by waiting. Other investors were harmed. Many managers suspended redemptions.
“The investor base is very important to us,” says Lorrie Landis managing director of credit investments at Tulane University. “We want funds to be very stable, don’t want to be hurt by whatever is going on with another investor.”
Fund managers also are paying more attention to the kinds of clients they get. Suzanne Murphy, head of strategic development at credit fund manager Claren Road Asset Management, said Claren Road’s investors used to be almost all a single type—95% were funds of funds. (more…)
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