Content area
Full Text
Institutional demand for liquidity and customisation inspires ?new products and approaches to risk management
From top: Shane Clifford and Omar Kodmani
Omar Kodmani, chief executive of $22 billion multi-manager Permal Group, speaks of "five years of turmoil and turbulence in the sector" as regulations, low interest rates and changing client needs have turned the hedge fund industry upside down.
But instead of being intimidated, Permal seems to have been invigorated by these challenges. Adopting an 'innovate or die' approach, the firm has forged new relationships, entered new markets, launched new products, and added further refinements to its risk analytics in the race to stay ahead.
"Our main focus is to adapt and change so that we are able to remain top tier," Kodmani says.
In particular, Permal has made big strides into the coveted US institutional market where in October 2014 it chalked up its biggest win to date: a $1 billion customised global macro mandate for the IAM National Pension Fund, a multi-employer plan based in Washington DC.
A big attraction for institutional clients is PMAP, Permal's $9.4 billion managed account platform which currently offers 103 separate accounts. PMAP is a major differentiator for the group, Kodmani says, and not only because it is one of the few buy-side platforms available.
It is also designed to showcase Permal's investment abilities with half of the accounts based on customised mandates, and active turnover to limit the selection on the platform to top quality accounts that are relevant to clients. "We have very high standards for PMAP. Managers are only on it if we feel they are worthy of our clients' capital," Kodmani says.
Permal has also been active in the rapidly-growing liquid alternatives market, upping its game with the launch of an open-ended alternative mutual fund in the US, to be followed in the middle of the year by a UCITS fund with a similar structure.
"It is a bi-polar world. Clients are either going very liquid or very customised," points out Shane Clifford, who joined from BlackRock in 2008 and is Permal's head of global business development.
At the longer duration end of the liquidity spectrum, Permal has rolled out a series of opportunistic funds, most with two-year lock-ups, and is now working...