Every Client is Unique
We have been designing, implementing and working in partnership with our clients since 1997 to develop investment solutions that aim to address their specific hedge fund investment and risk management needs.
With our origins as a hedge fund consultant, we have always been, and continue to be, fully committed to offering and developing a broad array of support and services to our clients. We view our highly experienced teams as extensions of our clients’ teams.
We aim to provide full investment operational and infrastructure support to supplement our clients’ oversight, experience and operational capabilities in managing their alternative investments.
Working with our clients, we build a detailed investor profile in order to develop a solution that best meets a client’s needs:
- Risk / Return Objectives and Parameters
- Beta Considerations
- Strategy Preferences
- Manager Preferences
- Client Involvement
- Transparency & Liquidity Requirements
- Tailored Fee Structure
- Reporting & Communication Requirements
- Operational / Structural Considerations
Flexible Approach
Our only business is helping clients invest in and maximise the benefits they receive from hedge fund investing. We work alongside our clients to develop and implement a hedge fund solution that addresses their specific requirements.
Over 70% of our assets are represented by customised solutions with partners who are broadly diversified by client type, requirement, sophistication and geographic location. Our experience, combined with the breadth and depth of our hedge fund platform and capabilities, enables us to construct hedge fund solutions that seek to conform to our clients’ fiduciary standards, while still accounting for their unique requirements.
An Integrated Platform
With our heritage as a hedge fund consultant and as a large institutional investor ourselves, our approach to hedge fund investing has been developed to solve the very same issues faced by other hedge fund investors – how to increase transparency and control, decrease costs, understand and aggregate manager data, and gain access to differentiated, high quality hedge fund return streams.
To address these needs, we launched our managed account platform in 1998 as an alternative way of investing in hedge funds for the portfolios we managed.
We have used our accumulated experience to refine our approach by investing heavily in our platform and its capabilities. This approach has led us to become one of the largest buy-side, hedge fund managed account platforms in the world at US$ 23.2bn*, with over 450* managed accounts launched.
Managed Accounts
Our managed account platform is built on the core principles.
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Portfolio Construction
Managed accounts provide investors with additional tools which are designed to increase the performance and value of their hedge fund investments. These tools can help tailor the hedge fund selection to complement an entire investment portfolio, and over time dynamically adjust the allocations as market conditions and the investor’s portfolio evolves.
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Improved Transparency
Managed accounts provide investors with additional tools which are designed to increase the performance and value of their hedge fund investments. These tools can help tailor the hedge fund selection to complement an entire investment portfolio, and over time dynamically adjust the allocations as market conditions and the investor’s portfolio evolves.
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Greater Control of Assets
The control of the structure transfers to that of the investor who is able to customise the terms of the managed account to meet their investment requirements. This flexibility includes the selection of service providers and the ability to dictate key terms such as the legal structure, jurisdiction, liquidity and risk limits.
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Cost Containment
Investors can access hedge fund managers who have improved terms at all levels of the managed account structure versus their commingled vehicles. These improved terms are not only limited to fees but include liquidity, governance, structural items and improved service provider fees negotiated through global rate cards.
A Range of Solutions
From our origins as a hedge fund research consultancy in 1991, FRM’s only business is developing solutions to assist clients to invest in and maximise the benefits they receive from hedge fund investing. Since the launch of our first flagship commingled portfolio in 1997, FRM has built upon this heritage to extend the range of solutions available to our clients.
Differentiated Investment Strategies
Each of our investment strategies aims to capitalise on defined market opportunities and a disciplined approach in manager selection and are broadly classified as follows:
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Credit Focused
Seek stability and consistency of return.
- Generally attempt to provide more consistent return profile. May offer income in some cases.
- Tend to focus on fixed income, relative value equities and other approaches, while generally maintaining less directional market exposure than growth orientated strategies.
- May apply leverage and depend on less liquid securities and strategies.
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Diversifying
May provide portfolio diversification benefits due to historically low correlation to traditional equity and fixed income investments, and/or hedge against inflation.
- Some trading strategies have historically exhibited low long-term correlation to traditional equity and bond investments.
- Other strategies may act as a store of value, potentially limiting the impact of inflation over longer time horizons.
- Some strategies can employ discretionary and systematic trading approaches across a wide range of markets and instruments. May use leverage and can be volatile.
- Less liquid strategies generally have longer capital lock-ups and leverage risk.
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Equity and Growth Focused
Seek growth and capital appreciation.
- May pursue a range of non-traditional investment techniques (e.g. concentration, hedging, shortselling, leverage, and derivatives).
- May employ value-added approaches using public equities, private equities, credit, and other instruments, with the goal of enhancing returns, and in certain cases, mitigating on the downside. In some cases, may be more volatile than traditional equity strategies.
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Multi-Strategy
May employ one or more of the above strategies and are therefore may be suitable initial investment vehicle for early adopters of alternatives.
VIEW OUR FEATURED STRATEGIES
Manager Research
We devote extensive global resources to sourcing, researching, negotiating with and approving hedge fund managers that we have investment conviction in.
A key part of our approach is ensuring we cover the entire investable hedge fund universe globally, including managers who are harder to identify due to their size, location or recent entry to the industry. Each member of our investment team is a specialist in their sector and based in key financial centres, giving them an understanding of local markets. Although we invest across all hedge fund manager sizes, we particularly focus on smaller managers whom we believe have the nimbleness to pursue opportunities not available to large managers, and who are more flexible on fees, terms and structures.
Risk Management
A key distinguishing aspect throughout our investment and implementation processes is our continued focus on risk management. Before any hedge fund manager is approved for investment, we perform extensive operational and investment due diligence on each proposed manager. Our risk management function is supported by a comprehensive and sophisticated set of systems to ensure the ongoing and detailed monitoring of all managers.
If we do not fully understand the risks associated with that manager and do not have the investment conviction to invest with that manager ourselves, we will not recommend them to our clients. We strongly believe that good risk management ultimately leads to superior performance relative to our peers.
Portfolio Construction
Our portfolio construction process is largely driven by our detailed understanding of hedge fund managers, their return characteristics and our forward looking view of the opportunity set for each manager and hedge fund strategy. The intimate knowledge of managers, their strategies and their behavior in different market environments is the key to building a successful portfolio.
When building portfolios for our clients, we believe it is important to follow a partnership approach with our clients. Our 19 years of experience in delivering successful portfolios has demonstrated that the portfolio construction process is dynamic, continuous and on-going, and we seek to closely involve our clients at all stages of the process.
We truly believe that a state-of the-art technology platform is crucial to the success of our business. Our institutional risk management framework underpins every aspect of our organisation. This is further supported by our cutting edge reporting and analytics, providing enhanced insight into the performance and risks of investors’ portfolios.
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Our Man FRM History ...
1991
- FRM founded in London
- Hedge Funds demystified published in cooperation with Goldman Sachs
1997
- Launched first Client Partnership Solution
1998
- Launched Managed Accounts Platform
2000-2001
- Developed MSCI Hedge Fund Indices in cooperation with Morgan Stanley
2005
- Further Expansion of strategy-focused hedge fund solutions
- Entered strategic relationship with SMTB
- Awarded first Managed Account advisory mandate
2008
- Refined investment approach following financial crisis
- Began providing seed capital to new managers
2010
- Managed Account platform opened to infrastructure inevstors
- Launch of Clarus online reporting and analytics tool
2012
- Combined with Man Group's Multi-Manager business
2014
- Expanded into US market through invested in US credit focused strategies
2015
- Expanded into US distribution market through investment into US Multi-Strategy portfolios
- Further enhancement of Clarus' capabilities
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