[REPLAY] Luke Ellis and Mario Therrien – Best Practices in Alternatives (Capital Allocators, EP.158)

Standards Development

The SBAI, formerly known as the Hedge Fund Standards Board, was established in 2008 to address concerns about hedge fund stability. Luke Ellis and Mario Therrien discuss its evolution from a manager-driven initiative to a balanced collaboration with investors. This shift was crucial for setting standards that align the interests of both parties. Ellis notes, "It didn't work if it was just managers trying to agree on good behavior; you needed a balance between what worked for managers and what worked for investors."

It didn't work if it was just managers trying to agree on good behavior; you needed a balance between what worked for managers and what worked for investors.

--- Luke Ellis

The SBAI now includes over 130 signatories and covers more than $1 trillion in assets, promoting transparency and integrity in the hedge fund industry 1 2 3.

   

Behavior Impact

The SBAI's standards have significantly improved hedge fund industry behavior by promoting transparency and integrity. Ellis highlights the reduction in negative incidents, noting fewer stories of misconduct in the media. "The goal was just to improve the industry's behavior overall," he states, emphasizing the importance of staying out of negative headlines.

The goal was just to improve the industry's behavior overall.

--- Luke Ellis

Therrien adds that the standards have fostered a better alignment of values, encouraging more managers and investors to join the initiative. The SBAI continues to expand its reach, aiming to include more managers and investors to further enhance industry practices 4 5 6.