Canadian Investment Review

Managed Accounts: Transparency at High Price

Written by Caroline Cakebread on Monday, March 8th, 2010 at 8:05 am

transparencyGun-shy institutional investors are boosting the number of managed accounts post credit crisis according to research by Preqin, an alternative asset research firm. However not everyone is convinced they offer better results for the higher price tag.

Results of Prequin’s survey show managed accounts are being snapped up by institutions concerned about transparency, liquidity and risk management post-Madoff and post-credit crisis.

A few highlights:
– 16% of institutional investors have allocated capital to a managed account
– 23% plan to do so in the next six to 12 months
– Top three reasons managers are offering managed are transparency (32%), liquidity (25%) and to meet investor demand (18%)

Some investors remain skeptical however – 38% of investors surveyed think they are too expensive while a further 34% don’t think they can beat their current pooled investment. Moreover, some managers aren’t planning to offer them any time soon – investors aren’t demanding them yet and they don’t have the infrastructure to do it.

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