Old Mutual unit moves to offer hedge fund transparency

UK-listed asset manager Old Mutual has launched Bright Capital, a fund-of-hedge-funds service that requires full transparency from hedge funds in their position reporting. Based on the ‘managed account’ concept, the move is targeted at attracting more institutional investors to the market, although at present Bright Capital is only offering the service to private clients.

Many traditional asset managers refuse to allocate large sums to hedge funds due to murky reporting practices. They say the reluctance of hedge funds to feed their day-to-day trading positions into their portfolio management and risk reporting systems means they lack a sufficiently robust profile of their true investment risks.

Bright Capital, an independent London-based operating unit with 25 staff, achieves transparency by setting up managed accounts with hedge funds’ prime brokers