Hedge fund investors have been demanding ever-greater transparency for years. High value is placed on information such as investment strategy, risk and exposure, and insight into underlying assets. Hedge fund managers have worked to meet this expectation, delivering more frequent and more granular reporting, but there remains a discrepancy between expectations and reality. 

This ongoing pursuit of transparency is one factor driving demand for separately managed accounts (SMAs). Unlike pooled funds, SMAs are investment accounts that are managed by investment managers for individual clients. This allows for customisation with regards to investment, risk and even service providers. It also delivers some tax advantages that investors value. However, the greater transparency offered by SMAs is of high importance to investors. 

There are two points to note here. First, this naturally means that any fund manager looking to offer SMAs must ensure that transparency is part of the project plan. There is complexity associated with a higher number of funds and investor fragmentation; the right information needs to get into the right hands with a high degree of accuracy. At the same time, the level of transparency needs to be higher – so managers need to share more information in an increasingly complex environment. To approach this without due consideration will lead to inefficiencies, errors and scrambling. 

Second, all managers must periodically step back from the daily grind to review and improve their investor communication processes. Expectations are changing and it is a rapidly-evolving space. Managers must keep up. Using the right technology can be a win-win scenario, as managers simultaneously improve the investor experience whilst reducing manual effort and the associated scope for errors. 

In our recent white paper – “Unlocking the potential of SMAs” – we consider the main challenges IR teams face in rolling out SMAs, and consider how this can be tackled to create an IR function that offers an excellent investor experience that scales. Read the paper now!