Albourne Partners Ltd. has drawn a wide line in the sand for hedge fund managers: Comply with global risk reporting standards or your fund will be dropped from the consultant's approved list. That list currently totals more than 2,000 hedge funds that manage a combined $300 billion on behalf of the hedge fund consultant's institutional client base.
London-based Albourne Partners was a primary force in launching The Open Protocol Enabling Risk Aggregation standards last year. They provide hedge fund firms with a template for collecting, collating and communicating market risks within their portfolios.
Now that MSCI Inc.'s RiskMetrics unit can readily generate reports using the OPERA standards, Albourne Partners will use a hedge fund manager's cooperation — or non-cooperation — as a knockout factor in its rating system, said Simon Ruddick, managing director and CEO. “There will be a grace period for existing managers. But if after a reasonable amount of time, they have not complied with reporting requirements, their hedge funds will no longer be recommended by Albourne,” Mr. Ruddick said.
This article originally appeared in the October 15, 2012 print issue as, "Albourne gives ultimatum to hedge fund managers".