What are the advantages of separately managed accounts?

Separately managed accounts offer four principal advantages:

  1. Transparency: Clients can view the complete record of transactions and positions held in their accounts at any time. Commissions, fees, and expenses are fully transparent.
  2. Liquidity: Clients can initiate deposit and withdrawal requests at will, without lock-ups imposed on hedge fund investors.
  3. Ownership: Clients maintain separate accounts at an independent, third-party custodian, allowing them to rely on the safety and security of a well-capitalized brokerage firm rather than a small money manager. Cable Car only has trading rights over accounts and does not have access to client funds except for the automatic deduction of its fee. Clients also maintain ownership of the underlying securities held in their accounts, rather than fractional interests in a pooled fund.
  4. Customization: Although Cable Car does not create custom trading strategies for clients, it is possible to restrict specific securities from being traded in an account (e.g. in order to satisfy an employer’s trading restrictions). Upon request, Cable Car can also temporarily liquidate positions for tax purposes.

Posted in: Managed accounts