Hedge Fund Intelligence New standards in Investor Transparency | Página 11

NEW STANDARDS IN INVESTOR TRANSPARENCY
OVERVIEW

WHAT KIND OF TRANSPARENCY?
Even prior to the crisis, however, the transparency bandwagon had been gathering momentum. Pacific Alternative Asset Management Company (PAAMCO), which was set up in 2000 in Irvine, California, is an example of a fund of
funds which was insisting on full position-level transparency long before the
crisis exposed serious fault-lines across the hedge fund industry.
“PAAMCO launched in 2000 and ever since then, we have demanded
position-level transparency from all our managers on at least a monthly basis,”
says Joshua Barlow, vice president, who joined PAAMCO in 2006 to perform
the firm’s operational due diligence. “In 2005, we
created a managed accounts platform to strengthen
the oversight of our investments and enable us to
customise our exposure. Today, all our new investments are either on our managed accounts platform
or through a fund of one.”
Whether or not investors are prepared to pay for
enhanced transparency is a moot point, although as
one manager points out, the success of the UCITS
movement in Europe suggests that some might be.
“We have seen clear examples of investors who are
very happy with managers’ Cayman-based strategies
moving money into the onshore versions of the same
funds,” he says. “They know full well that they will be Joshua Barlow, vice
paying a management fee of 1.75% rather than 1.5%, president of PAAMCO
but they appear to be willing to pay the extra 25bp to >> In 2005, we created
cover the extra costs incurred by the UCITS wrapper a managed accounts
for the added transparency it offers.”
platform to strengthen
Certainly, one of the reasons often cited for the popularity of UCITS is the robust standards of oversight the oversight of our
they are required to maintain. As Credit Suisse advises investments and enable
in a recent report: “Arguably one of the most effective us to customise our
measures taken by the UCITS directive to provide in- exposure >>
vestor protection is the requirement for UCITS funds
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June 2014 Special Report 11