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.