GLOBAL - Pension funds and other institutional investors are behind a surge in managed account demand at Man Group's newly-created multi-manager business.
Figures released this week revealed the $44bn (€29.6bn) London-based, FTSE100-listed hedge fund titan saw multi-manager managed account assets rise by 50% between March and September, to $6bn. Managed accounts now make up one-third of the group's multi-manager assets.
"An increasingly important part of our engagement with institutional investors is centred on our managed accounts capability, in response to their increasing demands for transparency, liquidity and control," said Peter Clarke, Man Group's CEO.
Man has been using managed accounts for its own fund of hedge fund portfolio for 12 years, but only recently opened the option to external clients. Demand has come from a broad range of regions and investor-types, according to head of institutional sales Martin Keller. The two largest allocators have so far come from a large US endowment fund and a German bank investing for white-label products.
"Pension funds are in there, but it's still at an early stage for that sector and only a few have executed on a MAC [managed account] basis so far," said Keller. "But all the research in the market suggests that institutional investors will continue to be the main source of inflow, and within that pension funds are expected to be a growing presence."
Man's managed account platform offers access to a stable of managers, packaged into off-the-shelf portfolios or offered on a ‘pick-and-mix' basis.
Moreover, Keller said there is increasing demand from clients who come knowing exactly what they want and wish to use Man purely as an execution platform.
"One of the two largest allocators wanted a customised blend of managers to fit with an existing hedge fund portfolio it had," said Keller.
"A theme that we are seeing is hedge funds moving out of the alternative investment asset allocation bucket and into buckets alongside the other asset classes. Investors are beginning to look into the underlying assets and exposures and use them for substitution, rather than as a stand-alone asset class themselves," he added.