Mon, May 11, 2020

Monique Melis Featured in the Financial Times Discussing Fund Liquidity

Monique Melis, Managing Director and Global Head in Duff & Phelps’ Compliance and Regulatory Consulting practice, was recently quoted by the Financial Times in an article on the impact of COVID-19 on the asset management industry. While widespread liquidity problems have yet to materialize, with only a small number of funds been forced to stop trading, the real test could still be to come. As the crisis continues and more companies with portfolios collapse, a new wave of redemptions may be triggered. To safeguard against this risk, funds can deploy liquidity risk management tools, ranging from deferring redemption requests, utilizing credit lines, to “swinging” the price of the fund to pass on the costs associated with high outflows to redeeming investors. 

The adoption of liquidity risk management tools varies from manager to manager. Monique believes some managers are “still reticent” to use mechanisms such as redemption gates or notice periods, fearing negative reaction from clients. She said no investor is enthusiastic about provisions that delay the recovery of his/her money.

Subscribers of the Financial Times can read the full article here.

Financial Services Compliance and Regulation

End-to-end governance, advisory and monitorship solutions to detect, mitigate, drive efficiencies and remediate operational, legal, compliance and regulatory risk.

Portfolio Valuation

Kroll specializes in assisting clients with the valuation of alternative investments, specifically securities and positions for which there are no "active market" quotations.