Managed account platform JV aims to take advantage of investor sentiment

IGS Group and MSS Capital have set up Managed Accounts and Governance Consultancy, a 50/50 joint venture partnership between the two companies. It has been created to design and build separate managed account platforms (SMAPs) for asset owners, hedge fund allocators and institutional investor clients.

Both companies have been involved in building and managing a total six SMAPs.

SMAPs have been available for over 10 years as a defined structure for accessing the returns of hedge funds. However, only 2% of total industry assets are managed through these structures.

These platforms provide separation and independence of valuation, custody and power over liquidity terms from the hedge fund manager. The hedge fund manager is able to execute a strategy as normal with all the assets held on the in independent, segregated accounts for the investor.

These systems normalise valuation risks, un-announced style changes and can detect fraud. Usually the investor is better informed and able to make better investment decisions.

SMAPS are expected to be more popular in 2009 as hedge fund managers respond to investor demands for maximum levels of transparency, liquidity, reporting and governance. Estimates vary with some claiming as much as 25% of the assets invested in the hedge fund industry will be expressed via independent SMAPs by the end of 2012.

MSS Capital is an independent asset manager and investment adviser for qualified investors in hedge funds. It structures and runs bespoke managed account platforms for institutional and retail hedge fund investors and is the investment advisor to the FTSE Hedge Fund Index series of products.

IGS Group is a full-service provider to the alternative investments product and investing community.