Can emerging hedge fund elephants stay nimble and responsive?

Nov 18th, 2010 | Filed under: Hedge Fund Industry Trends, Hedge Fund Operations and Risk Management, Today's Post | By:
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Apparently, size does matter.

That’s the message from assurance, tax and consulting firm McGladrey’s latest hedge fund industry report, released this month (click here to download the full report for free; a short questionnaire is required).  The report, a survey done in conjunction with Greenwich Associates, makes plain that when it comes to attracting institutional assets, most mid-sized hedge funds simply don’t have the infrastructure and personnel to truly service those kinds of allocations.

Indeed, while the majority of hedge funds surveyed for the report said they’re confident they have the girth to bring in and keep institutional assets, only a fraction of those have more than one full-time employee that handles client services. Even fewer than that have an automated reporting system that can satisfy what institutional investors require (see bar graph below showing managers’ readiness to meet investors’ demands).

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