As part of a flight to safety, institutional investors are increasingly looking to managed account platforms to shore up hedge fund investments, according to Societe Generale.
"While [Societe Generale-owned] Lyxor Asset Management saw a number of withdrawals from their hedge fund managed account platform through the last quarter of last year, since the beginning of this year there has been an increase in interest and actual net cash inflows," Societe Generale Corporate & Investment Banking director Paul Stevenson said.
"Currently we have one local fund-of-fund manager and an Australian asset consultant that are looking at putting money into Lyxor."
Stevenson said that while institutional investors might have been wary of the fees involved with investing in managed account platforms, many were now seeing the benefits.
"Institutional investors have been critical in the past of the fees involved, but following the events of 2008 this criticism has been muted," he said.
Investing in a managed account platform such as Lyxor allowed for investing potential, with more security on the downside, he said.
"Lyxor has 160 staff dedicated to their hedge fund business who check on price, market risk, counter-party risk and legal risks. Paying for these kinds of checks and balances provides more security," he said.
"Institutional investors have had a tendency to move from fund-of-fund to individual investments. However, it is difficult to have the required expertise to conduct due diligence on each fund."
Lyxor is wholly-owned by Societe Generale and is headquarted in Paris. The managed account platform comprises over 100 funds that cover a number of hedge fund strategies.
