Capital Allocators – Inside the Institutional Investment Industry Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158)
Sep 28, 2020
In this engaging discussion, Luke Ellis, CEO of Man Group, and Mario Therrien, head at CDPQ, share their insights on the hedge fund industry's evolution. They delve into the Standards Board of Alternative Investments, exploring how it fosters collaboration amid diverse interests post-financial crisis. The duo emphasizes the importance of transparency and operational due diligence, while also discussing the future of the industry, technology's impact on investment decisions, and the need for fair fee structures to maintain investor trust.
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2008 Hedge Fund Industry Struggles
- In 2008, hedge fund managers faced scrutiny for poor behavior and performance, including self-dealing and lavish expenses.
- This led to concerns about the industry's stability and prompted discussions on setting standards for better practices.
Collaboration for Standards
- Setting industry standards requires collaboration between managers and investors due to inherent conflicts of interest.
- The Standards Board for Alternative Investments (SBAI) provides a platform for such discussions and consensus-building.
SBAI Expansion
- In 2011, the SBAI was primarily Eurocentric but expanded globally through investor buy-in and integration into due diligence processes.
- CDPQ incorporated SBAI standards into their operational due diligence, encouraging managers to adopt them.