Moody's To Rate Managed Accounts

Nov 23 2010 | 11:57am ET

Moody's Investor Services is extending its hedge fund ratings system to one of the industry's biggest growth areas.

The ratings agency plans to begin rating managed accounts and managed account platforms. It will used the same operation quality rating methodology that it currently uses to rate the hedge funds that use its service.

"The operational risk for hedge fund shareholders and managed account holders is similar," Joanne Job, who created the rating implementation guidance for managed accounts at Moody's, said. "We therefore felt it was appropriate to use a modified version of our existing operational quality rating methodology to analyze the risk associated with managed accounts."

Last year, Moody's changed the way it rates hedge funds, grouping the ratings into five categories and offering a ratings scorecard to make its methodology clearer. The agency has been rating hedge funds for four years.

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