Investors Taking Greater Control Over Their Investments
Managed accounts have been in high demand since the Madoff scandal broke earlier this year. Despite having higher costs, managed accounts offer investors several benefits they now deem important: daily liquidity, increased transparency, and customizable portfolio construction.
In fact, a number of investors have told BHA analysts that they are making investments only through managed accounts. This is the case for a Connecticut-based wealth advisory firm. It said that it is investing only through managed accounts because of the full transparency they offer. A fund of funds located in San Francisco voiced the same reason for using this strategy plus an additional one: weekly liquidity.
Today, investors want greater control. A recent Deutsche Bank study showed that 43 percent of investors are now considering making investments through managed accounts. Their potential to mitigate some of the risks inherent in the current hedge fund model make them extremely attractive. BHA analysts expect this trend to continue near term.