NEW YORK (HedgeWorld.com)–A report authored by Vadim Zlotnikov of Bernstein Research concluded that hedge funds will have a great continuing effect upon the rest of the asset management world. But this effect might not be found where many expect–whether they’re looking with hope or alarm.
The June 2003 report, “The Hedge Fund Industry: Products, Services or Capabilities?” said that hedge funds would not be a direct competitive threat to the rest of the asset-management industry. Most hedge fund categories show a pattern of returns similar to that of straddle options or collar options to the Standard & Poor’s 500 stock index, with significant downside protection but also somewhat limited upside potential, which is not a performance in itself sufficient to set the world aflame.
It found much more significance in the “service propositions and the … capabilities underlying their current products than [in] current product offerings themselves.”
Mr. Zlotnikov acknowledged the critical role of Guillermo MacLean in researching, structuring and preparing the 75-page report. Defining hedge funds as private investment vehicles not registered with the Securities and Exchange Commission and available to accredited or qualified investors, Messrs. Zlotnikov and MacLean distinguish four views of the underlying value of such funds:
What Your Peers Are Reading
1.A high service level to ultra-high-net-worth and high-net-worth clients;
2.Redefinition of traditional relationships or contractual terms between clients and portfolio managers;