Lyxor and Dbselect

Lyxor and Dbselect

The hedge fund industry is constantly changing. New forces such as increased regulation, increased institutional participation in different assets classes compounded with the increased focus on risk management has forced many players in this industry to either adapt to new rules of alternative fund management or risk losing out to the competition. Many players have been forced to revisit the ways in which they run their companies and the strategies that they use in order to adapt to the requirements of most institutional investors. Two of the companies that have managed to stand out in these regard are Lyxor Asset Management and Deutsche Bank especially with regard to their managed account platforms.

Lyxor’s business model is made up of three major pillars namely client driven organization, research driven solutions and an advanced risk-management culture (‘Our Business Model’). Its client driven organization pillar ensures that the company is committed to innovation and transparency, and that it is strongly committed to client oriented solutions. Its research driven pillar founded on its reliance on market research and proprietary models that are applicable to the company’s portfolio management culture. Finally, its advanced risk management culture relies on an independent risk monitoring framework that is maintained throughout the lifecycle of all investments. Additionally, the company constantly monitors market risks, valuations and investment limits. One of the factors that makes Lyxor stand out is its offering of customized investment management solutions in its managed fund platform. In this platform, Lyxor has more than 17 years of experience in managing fund portfolios in areas such as strategy, liquidity and risk/return options.

Lyxor has undertaken processes and systems designed to attract and retain some of the most demanding money managers. It has a team of skilled investment professionals that are dedicated to its alternative investment products. Lyxor strives to minimize the risks and correlations of traditional asset classes. One of the ways it does this is to focus on idea generation and portfolio construction (Dragomanovich, 2013). On idea generation, it relies on its team of analysts. This research team has cross-asset capabilities allowing them to identify any opportunities or risks contained in any chosen strategy. Additionally, a quantitative research team is there to complement the portfolio managers in portfolio optimization and also in the calculation of implicit correlations in the portfolios that the company has. Lyxor’s main managed accounts platform is made up of over 100 funds which are advised by external managers. It has been managing this platform since the late 90s. The managed fund platform has been able to weather different storms and edged them ahead of the competition.

Like Lyxor, Deutsche bank also provides a wide