Hedge fund managers race for the future

A panel of hedge fund managers and senior operations professionalsat the sixth annual Gravitas Trends event used the turbulent year for the financial markets and the alternative asset management industry as a springboard to draw lessons to improve the industry. Gravitas Chief Executive Officer Jayesh Punater opened the conferenceat the Mandarin Oriental in Manhattan by challenging the more than 100 participants and panelists from alternative asset management firms to figure out how to “compete for the future.” “The stage is set for true competition, not only for clients and performance, but also for an emerging landscape of next generation financial services institutions,” he said.

Maneet Ahuja, a producer at CNBC’s “Squawk Box,” was joined bySonia Gardner, the co-founder and managing partner of Avenue Capital to discuss building one of the hedge fund industry’s largest and most successful operations. Gardner talked about how infrastructure remained important as the firm moved from a handful of employees to today’s global company.

“We never get to a point where we feel that operationally, that’s it, we’re done,” Gardner said. “We are always looking to improve our capabilities to better serve our investors.”

Ahuja and Gardner’s conversation also served as a preview to Ahuja’s forthcoming Wiley& Sons book “Alpha Masters,” which includes profiles of a dozen leading hedge fund luminaries including Gardner, John Paulson, Ray Dalio, Jim Chanos and Pierre Lagrange.

Credit Suisse Managing Director and Global Head of Prime Services Phil Vasan moderated two panels, asking a half-dozen executives how they saw the hedge fund industry navigating a world that’s seen a European Sovereign Debt Crisis, slackening growth in the United States, rising volatility and several extreme natural disasters in just the past six months.

One panelist, Krishna Memani, Senior Vice President and  Director of Fixed Income at OppenheimerFunds, tried to examine what exactly “alpha” meant in a time where the line between traditional and alternative managers is increasingly blurred. “You can call alpha something you can get cheaply,” Memani said. “For me, the ‘a’ in alpha stands for active decisions.”

In a second panel, “Enterprise Alpha – Edge or Unnecessary?” the discussion centered around whether or not hedge funds can distinguish themselves beyond performance, and how, if at all, institutional quality operations can contribute to the overall success of a fund.

“The biggest demand right now is for education,” said Brian Ruane, CEO BNY Mellon Alternative and Broker-Dealer Services. “Investors want to know what exactly funds are doing, and they are drilling down into operations deeper than ever before.”

The night ended with Vasan soliciting ideas from panelists about what would be on the agenda at Gravitas’ next Trends event in the fall of 2012.

“We’re proud to be a part of Gravitas Trends, an event that helps set the agenda for the year ahead,” said Advent Senior Vice President Chris Momsen. “By participating in this event, we help our clients get ready for the changes that will impact their business in the months to come.”   About Gravitas

Gravitas is a leading provider of business consulting and technology solutions to the alternative investment and financial services industries.  Founded in 1996 as Gravitas Technology and known as Gravitas since 2010, the company provides business consulting services, software development, systems integration and knowledge process outsourcing to hedge funds, private equity funds, brokerage firms, investment banks, traditional asset management firms and small and medium sized financial services firms. Gravitas is focused on providing clients with creative solutions designed to make their firms more efficient through outsourcing, co-location, disaster recovery and other innovative technological solutions. The company is based in New York with offices in Greenwich, Connecticut, Mumbai and Ahmedabad, India. www.gravitastechnology.com.