New alliance to consult on hedge fund portfolio risk

PlusFunds, the New York-based hedge fund exchange, has teamed up with the Albourne Group, a hedge fund risk consultant, to form Albourne Plus (A+), a new risk consulting service for institutional investors.

A+ will offer advisory and data capabilities based on the integration of both “transaction level” and “non-transaction level” data. It claims that PlusFunds’ technology infrastructure, which generates daily net asset values and risk data for funds listed on its platform, combined with the consulting expertise of the Albourne Group, will provide a depth of qualitative and quantitative analysis not previously available to hedge fund investors.

Data integration and flexibility are important for hedge fund investors seeking to analyse risk across a variety of hedge funds with varying levels of portfolio transparency. “The difficulty [for institutional investors] to collect and integrate information from hedge funds has led to more frustration than progress,” claimed Simon Ruddick, managing director of the Albourne Goup. "PlusFunds’ platform has until now presumed access to security-level data; Albourne’s analytics have been developed within the constraints of limited access to data. The fusing of these capabilities into A+ will provide institutions with the ‘best available’ short-term solution that automatically upgrades into the ‘best-conceivable’ long-term solution as data access improves over time.”

Created in 1998, PlusFunds designed its risk analytic platform in co-operation with Standard & Poor's, Advent Software and the RiskMetrics Group. Its shareholders include JP Morgan Chase, Merrill Lynch and Credit Suisse First Boston. The Albourne Group advises institutional investors on the residual risks associated within funds and portfolios.

A+ says the Fort Worth, Texas-based Ed Bass Group will be signing up as its first client. “Albourne has provided risk management services to our organisation for a number of years,” said Douglas Bratton, chief investment officer of the Ed Bass Group. “We expect the A+ platform to provide significantly improved portfolio-level risk management capability.”