PT - JOURNAL ARTICLE AU - Anthony M Sepci AU - John M Hermle TI - How the Credit Crisis Has Affected Investment Managers’ Use of Complex Structured Investment Instruments AID - 10.3905/JSF.2009.14.4.028 DP - 2009 Jan 31 TA - The Journal of Structured Finance PG - 28--35 VI - 14 IP - 4 4099 - https://pm-research.com/content/14/4/28.short 4100 - https://pm-research.com/content/14/4/28.full AB - Fund managers as well as banks have been affected by the current financial crisis. This article focuses on the strategies they are adopting and concerns over the complexity of the investment instruments they are using. This article examines how the fund flows, returns, and reputations of investment managers have been impacted by the economic conditions of the past year. Funds are increasingly using derivatives as part of their investment strategies. The credit crisis has highlighted the importance of fully understanding the pricing and risk of such investments. Key findings in the article include the following: 1) Investors do not have the same enthusiasm for complex instruments as fund managers. 2) Trust in fund managers has fallen as a result of the credit crisis; lack of skills and experience is a key concern. 3) Risk management, valuation methods, and governance structures are all being reevaluated. 4) Making fund management successful in the future requires a renewed focus on the client proposition. In conclusion, the article suggests fund management firms would be better served sticking to core competencies and innovating only where the appropriate infrastructure exists.TOPICS: CLOs, CDOs, and other structured credit, exchanges/markets/clearinghouses