Investment banks are making use of their quantitative expertise and client knowledge to innovate algorithmic strategies that rival products typically offered by hedge funds. Shane Edwards, head of pricing & structuring at RBS Global Banking & Markets discusses the rationale and financial engineering behind these so called 'dynamic strategies'
With recent economic turmoil diminishing appetite for traditional long-only equity products, absolute return strategies are rising in popularity. Hedge funds should be seeing large inflows of investments, but many potential investors may have concerns including: large fees, 'black box' trading methods, weak internal controls, lack of regulation, key person risk, large minimum investment sizes and illiquid secondary markets.
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