Money managers under the microscope
It seems that investors will have long memories of how hedge funds behaved in the bad times when it finally comes to putting money back into the industry again.
The wipeout of 50, 60 or 70 percent of the industry that was predicted by some commentators last year hasn’t quite happened, partly because redemptions have slowed dramatically of late, partly because some smaller firms are still limping along in the hope that conditions will improve soon, and partly because many funds imposed gates last year, limiting investors’ ability to get their money out.
However, according to Stuart McLaren, financial services partner at Deloitte, some will feel the wrath of investors further down the track.
“Investors will avoid managers who’ve imposed unreasonable gates and side pockets primarily to protect their income stream,” he told me today.