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Moody's publishes approach for rating hedge fund managed accounts


Date: Tuesday, November 23, 2010
Author: Emily Perryman, HedgeWeek

Moody's has extended its hedge fund Operational Quality Rating Methodology to encompass managed accounts.

Moody's will use the same OQ rating definition, scale and approach for managed accounts, including managed account platforms, as for a traditional hedge fund.

"The operational risk analysis for hedge fund shareholders and managed account holders is similar," says Joanne Job, Moody's analyst and author of the rating implementation guidance. "We therefore felt it was appropriate to use a modified version of our existing Operational Quality rating methodology to analyse the risk associated with managed accounts."

Estimates suggest that the top ten managed account platforms exceed USD40bn in assets under management (as of March 2010) or approximately two per cent of the total hedge fund industry assets.