Hedge funds are increasingly turning to outside service providers to satisfy institutional investor demands for managed accounts and to connect them to prime brokers.
Israel A. Englander’s Managed Accounts and Prime Services (MA&PS) division, provides a platform for small to midsized funds that combines the two capabilities.
“The MA&PS platform is a dynamic, streamlined and innovative solution provider for both investors and hedge funds that doesn’t exist in the market place,” said Brett Langbert, managing director of the MA&PS division.
Created to serve the needs of the sub-$250 million AUM hedge fund community and investors, MA&PS provides traditional prime brokerage services that are enhanced with customized investment solutions targeting entities that manage or invest capital via a separately managed account (SMA) structure.
“Managed accounts are great, but they can be very costly,” said Langbert. “We are the only broker-dealer that’s providing an open platform for both prime services and managed accounts.”
Prior to joining MA&PS, Langbert was president of HedgeCo Securities, where he managed a broker dealer that performed prime broker services, capital introduction and third-party marketing.
“The catalyst for me to join Englander and run sales for MA&PS was that Englander has figured out a way to provide technology solutions for hedge fund managers and allocators via managed accounts,” Langbert said. “IAE has a great brand, and this offering is unique.”
For hedge fund allocators, the MA&PS platform simplifies the task of setting up managed accounts.
“We are taking our technology and putting it on the allocators’ desktops,” said Langbert. “This allows them to aggregate their risk in one portal. Historically, allocators with multiple managed accounts lacked such visibility.”
Demand for managed accounts has escalated since the financial crisis.
“Post-2008, allocators are demanding managed accounts, particularly with emerging managers,” said Langbert. “While emerging managers have typically outperformed traditional managers, allocators are taking on more risk because the emerging manager doesn’t have an established brand.”
This is true throughout the world.
QInvest, Qatar’s leading investment bank, has launched the QInvest Managed Account Platform (QMAP), an open architecture Sharia’a compliant managed account platform that allows shareholders and investors to invest in asset classes such as mutual funds and hedge funds, managed by globally recognized investment managers.
QMAP brings the capabilities of some of the best managers in the world to investors, who would like to adhere to the principles of Sharia’a, through an institutional standard infrastructure, according to QInvest.
“QMAP will be adding more funds and bespoke client investment propositions for the firm and its clients over the coming months,” said Dr. Ataf Ahmed, who developed the platform. “QInvest is looking to attract investors who would prefer a principled investment choice, although initially it expects most interest from investors seeking Sharia’a compliant solutions.”
QInvest is working with investment managers such as Capital Management, Edgewood Management and GAM, and has built the platform’s operational processes in conjunction with Nomura International.