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The pressure to perform

Mar 9, 2011 12:42 UTC

By Ed Moisson. The opinions expressed are his own.

In a recent television programme, Outside the Court (BBC, 31 January), one man, when asked why he was standing outside Highbury Magistrates Court in London, replied, “It’s an occupational hazard. If you’re a thief you’re gonna get nicked now and again, ain’t you.” Surprising candour, if an unsurprising reality.

While fund managers’ first aim is to generate money for investors, not take from them, the reality of “occupational hazard” is worth considering. Most obviously, this manifests itself as the pressure to perform, but also, linked to this, the pressure to justify the fees being charged and the range of funds on offer.

First up some context is useful in seeing the types of funds that investors have been choosing. Just taking equity funds investing globally as an example, sure enough, the pressure to perform manifests itself with most money clearly flowing to first quartile funds (the best performers). Adding further pressure in 2010, 1 percent of funds in the UK hoovered up around 30 percent of inflows to the industry.

Zooming in on some of classifications (or sectors) that have seen most activity, a comparison with pre-crisis sales in 2006 highlights both the increased size of inflows in 2010, as well as the shifts in fund classifications being favoured.

Can hedge funds fix their image problem?

Emily Chasan

Mar 4, 2011 21:19 UTC

At the annual Hedge Funds Care benefit in New York on Friday, Anthony Scaramucci, managing partner of $7.4 billion hedge fund seeding and fund of funds SkyBridge Capital, had some harsh truths for the hedge fund industry.

“Our industry has a terrible, terrible reputation,” Scaramucci said as he accepted an award from the Hedge Funds Care charity Thursday night in front of 1,200 of his closest friends and expressed why he believes hedge fund managers should donate to charities.

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Christopher Vellacott

Mar 4, 2011 07:54 UTC

RTR1SGF8 News and views on the asset management industry from Reuters and elsewhere

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Hedge funds head for Malta to avoid regulation – Financial Times

UK freezes Libyan wealth fund assets - Financial Times

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Christopher Vellacott

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RTR1SGF8 News and views on the asset management industry from Reuters and elsewhere

Hedge fund manager Paulson gets HK securities licence – Reuters

Celebrity financial adviser Starr sentenced in fraud scheme – CNN

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Christopher Vellacott

Mar 2, 2011 07:46 UTC

RTR1SGF8 News and views on the asset management industry from Reuters and elsewhere

California hedge fund manager settles SEC charges - Reuters

Top 10 hedge funds make $28 bln for clients - Financial Times

SEC charges ex-Goldman director in insider case - Reuters

Hedge funds took in nearly $11 bln in Jan - Reuters

Investing in Egypt after the revolution: A fund manager’s view

Emily Chasan

Feb 25, 2011 21:05 UTC

Traders work at the Egyptian stock market in Cairo October 28, 2008. REUTERS/Amr Dalsh (EGYPT)

It has been two weeks since Hosni Mubarak was removed from his 30-year rule in Egypt. Banks are open and many Egyptians have resumed their jobs, but the country’s stock market remains closed and investors are wary about region. Should they be?