Hedge Funds Vs Managed Accounts

The growth of the forex hedge fund industry has been well documented in the media and through heightened interest the regulators have taken in the sector. No longer just a domain for the ultra high net worth investor and secretive private banking sector, hedge funds now play a growing role in portfolio diversification and liability-driven investing, and hence fall inside the scope of pension funds, asset managers, institutional investors and retail investors.

Unregulated and secretive – forex hedge funds have produced awe and bewilderment for investors when providing stellar returns; and fear and loathing when they have lost money and where collapsing hedge fund managers disappear with investor’s cash.

Institutional investors see the main barriers to further growth in the industry as being the lack of TRANSPARENCY, RISK CONTROL, and LACK OF REGULATION. 

However, when one studies hedge fund failures, investment risk only results in approximately 40% of all failures whilst operational issues result in 60% of all failures. Furthermore, operational failures are never the result of just one event – they take the form of a combination of items such as misrepresentation, inadequate resources, misappropriation of funds and unauthorised trading.

Forex Managed Accounts are the key to addressing the above-mentioned investors concerns and helping to reduce the risks associated with hedge funds.

Currency Managed Accounts help take forex hedge funds and their investment strategies further into the main stream institutional universe, where their benefits can give substantial upside to investment portfolios – whilst helping protect against the perceived downside of investing in a risky and lightly regulated environment.

Managed Accounts, with daily position level transparency, legal framework and detailed due diligence, are able to provide that essential safety net. Daily position level transparency results in daily valuations of portfolios and enhanced risk management for end-users. Should an event arise in which risk and legal parameters are broken, the enhanced liquidity results in quicker liquidations and exit of the hedge fund manager in question.