By Neil O'Hara
Doug Shaw, head of alternative investments at BlackRock in London, doesn't like to offer managed accounts to investors, and it's not hard to understand why. "If one raises money in the fund on the stated and transparent terms, there is something inherently discourteous if one then raises money for the same strategy in a managed account on different terms," he says. As a result, Shaw uses managed accounts sparingly in the firm's $20 billion portfolio of hedge fund strategies and strives to ensure that fund investors are treated fairly.
BlackRock's qualms notwithstanding, managed accounts became all the rage last year after hedge funds halted redemptions at the end of 2008. At that time, investors were desperate to get their money, but they couldn't—and they began to eye managers more skeptically, demanding to get a better handle on what they were investing in on a daily basis.
