FINANCIAL TIMES MONDAY SEPTEMBER 1 2008 11
In addition to the stability of its capital base, Jonathan Kanterman also assesses how professionally a firm is run. Transparency is critical. Does performance consistently correlate with strategy, or does it...
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FINANCIAL TIMES MONDAY SEPTEMBER 1 2008 11
In addition to the stability of its capital base, Jonathan Kanterman also assesses how professionally a firm is run. Transparency is critical. Does performance consistently correlate with strategy, or does it suggest that the fund has exposure in unexpected places? But to Mr Kanterman, the most persistent risk in today’s environment is
marking assets to market. Lack of liquidity and fair pricing can drive down the performance of a fund when a few panic-induced transactions become the benchmark on which valuations are
based. “When you have extreme swings in asset pricing that occurs irrespective
of the asset value,” says Mr Kanterman, “then one needs to be extremely cautious of
leveraged hedge positions because lending covenants could easily be breached and
loan facilities pulled on short notice.”
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