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TPM / Convergence


Third Party Marketing / Fund Convergence

Daylight Robbery of Public  Savings / Pensions In Alternative-Mutual Convergence: “Muppets Still Paying 2 and 20 to Play!”

FPM principals tend to believe that the investment management industry has reached a point at which a revolution in principles should take place. Principles which relate to to ‘rhetoric versus reality’ and propagating myths about the art of banking.

Our third party marketing of funds is aimed at exploiting convergence between extraordinary "alternative" funds and ordinary mutual funds via identifying distinct classes and features.

An art akin to what was once referred to as ‘Gentleman Banking’ , a culture of gentlemanly propriety and conservative dealings. An art which has been degraded to a drama exercised by public relations and media management, which lacks the entrepreneurial idealism purported by investment banking. Performance standards and concentrated risk-taking have been jettisoned in conventionally boutique hedge fund operations. 

Through obfuscation, false-education and distraction-management we are led to believe hedge funds are still the small "edgy" partnership vehicles of high net worth individual investors. All the while hedge funds and their bretheren are accepted as main stream asset-allocation class to enable access of greater public savings (assets under management), while maintaining the high total-fees on them. Asset managers reasoning has been replaced by opaque revelations as strategic window-dressing rationale, often echoed by supporting obsequious pseudo-informed public-relations  and media types. 

The arduous road to convergence between traditional investment management and the fandangle alternative investments products are the economic challenges of the FPM enterprise. For example, majority of mutual investment fund assets are characterised by charging less than 1% total expense ratio. Then there are other fund structures and strategies that predicate a higher expense ratio, such as typical of active managers like hedge funds. Yet when comparably looking at the long-term returns of these >1% TER, there is no significant performance persistence which justify higher the costs. 

In effect there has been an intense re-branding and splitting of asset management, at least since the turn of the new Millennium, known as the alternative investment management companies (Aimcos). Hedge funds and private equity pools were formerly boutique opaque operations accessed by high net worth individuals, who formed mutually informative close relationships with the specialised private managers. The institutional version were investment banks' brokerage and their 'Chinese wall' separated corporate finance. Nowadays, these once turbo-charged boutique managers serve an increasingly larger institutional pension allocation. This is an alarming risk development considering the phenomenon of ever present pension deficits, even from savers with plain vanilla allocations. 

FPM essentially and fundamentally juxtapose hedge funds, mutual funds and other hybrid portfolios, and assert that the former is generally higher leveraged and riskier than the latter. If any wish to counter that, we say they are not hedge funds and are ‘me-too’ imposters on the band-wagon for higher fees while returning market or beta performance. Even if a hedge fund does not have any actual leverage (such as purported by William Ackman’s Pershing?!), the positive and disastrous consequences from the principle of leverage is universally understood. The contradiction-filled fallacy of alternative investments is that which FPM seeks to demystify for the broad institutional investor base. We strongly do not believe paying more than 1% TER or “2/20” is warranted, unless accompanying performance edge or other capital enhancement benefit is persistently evident. So we distinguish institutional investment funds, not simply by their overrated risk-adjusted performance metrics, but using in-depth historical knowledge of the “edge” between hedge funds and their media-eclipsed mutual funds. 

Through FPM convergence enterprise we have a particular leaning towards smaller boutique operations alternative managers who endeavour to capture real enterprise value versus establishment institutional funds. Most investment professionals understand this arbitrage or debate as 'performance harvesting versus asset gathering' models of fund management. So we have fostered commercial ties with traditional and alternatives asset management. In particular with emerging manager hedge funds and other alternative investments platforms from mutual fund offers. 

If the FPM enterprise service is still vague to the reader we are rationally activated on our “convergence” mission principles. Please do contact and engage us to do some “weeding” as we examine “How Does Your Garden Grow?”

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FPM welcomes sensible feedback on our blogs / website. Through our work FPM is evolving from an asset advisory model to an asset management proposition.