Morgan Stanley plans hedge fund platform

Aug 7, 2007 @ 4:23 pm

By Aaron Siegel

Morgan Stanley will launch a hedge fund platform designed to improve liquidity and transparency for institutional investors.

The New York-based investment bank said the program, which already has 15 funds signed up, bears similarities to managed account platforms operated by the likes of Puteaux, France-based Lyxor Asset Management, according to a Financial Times report.

Each hedge fund on the platform will have to comply with specific investment guidelines and file a daily risk report to investors including an assessment of whether the guidelines are being met.

Combined with weekly liquidity, the system is intended to allow investors to sell a fund under certain circumstances.

Such as, if the overall exposure to emerging market securities has risen beyond their comfort zone.

Ted Hood, managing director of LiquidFunds, said the embedded liquidity and transparency would allow a greater range of institutions to invest in hedge funds, according to the report.

Morgan Stanley will commit $200 million to the platform, which will include funds from New Star, ING Clarion and RAB Capital.

The minimum investment is $500,000 and there will be a charge of 0.35% basis points and underlying hedge fund fees.

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