Rolling out the red carpet

Once upon a time, pensions were the ultimate investor for a hedge fund manager. Retail investors could wait while the red carpet was rolled out for bigger hitters.

Managers’ preference was reinforced when often highly leveraged wealthy individuals, their banks and advisers, pulled money quickest in the crisis – many funds removed the welcome mat to them while replenishing assets. “In the crunch, Europeans and Swiss private banks just did not seem to understand what we do,” said one of London’s biggest, speaking anonymously. However, Richard Watkins from independent fund raiser Liability Solutions says “pensions are not the be-all and end-all”. It is folly for managers to blanket-reject any type of investor, he said, not least because many typ...