European hedge fund placement agents plan trade association

A group of European third party hedge fund marketers is planning to establish an association to represent their industry and set out a code of conduct, in a further sign of the $2trn industry regulating itself.

Around 60 placement agents from London and the Continent met in London in November to kick-start the project.

The independent marketing community is quite fragmented, ranging from one-man operations, to larger firms with dozens of staff.

This diversity makes it difficult to quantify the industry, but it is thought Europe has about 85 firms, around 90% of which are in London.

Five are leading the push for a representative body, including Liability Solutions, which is headquartered in London’s Mayfair, home to many hedge funds. It also has an office in Geneva – home to many investors in hedge funds.

Richard Watkins, chief executive officer, said the new group plans to set up a website with information for investors, including how to contact marketers, and areas they focus on if an allocator wishes to seek a specific hedge fund strategy.

The association will also instate standards for its members.

Watkins countered suggestions his peer group was sometimes viewed as selling products without concern about their quality.

Over its life, Liability Solutions has met with more than 1,000 institutions that invest in hedge funds, and has organised over 5,000 one-to-one meetings between investors and investors over its life.

It has also conducted about 300 roadshows with funds.

Watkins said maintaining the trust of investors was key for his industry. This is demonstrated by the fact his firm’s fund clients have changed over time, but many investors that were present when he founded Liability Solutions are still allocating to the industry now.

David Walker

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