Hedge fund buys Argentinian mountain

I attended an interesting roundtable held by Omgeo this morning. Kicking off the discussion, Omgeo's industry relations manager Tony Freeman reported a few things he'd heard at a recent ISITC event that supported his view that globalisation and diversification of increasingly complex tradeable instrument types is taking the market into new territory.

Apparently one hedge fund that is active in trading weather derivatives has bought an Argentinian mountain so it could install rain gauges to collect accurate measurements on rainfall patterns. It sounds like a bit of an extreme measure, although it does make sense if the hedge fund wants its own primary data source to feed into its risk calculations. But it probably posed a novel challenge for the accountants looking to value this (literally) massive asset on the balance sheet.

The roundtable featured Marianne C. Brown, President & CEO, Omgeo; Simon Haggerty, Executive Director, Global Operations, UBS; Brian Mitchell, Head of Dealing & Portfolio Control, Baring Asset Management; and Tony Kirby, (on gardening leave after leaving Accenture but soon to be Head of Regulation and Compliance at Ernst & Young).

The discussion covered a range of topics -- the changing profile of the back-office, the impact of MiFID on operations, and how operational latency is lagging behind execution latency. I'll write-up a few more of the highlights later this week.