Report: Hedge Funds Give Institutions Transparency They Want

Jun 14 2011 | 8:44am ET

Hedge fund managers are opening their books to institutional investors, according to the latest survey by Preqin.

A full 90% of the 50 institutional investors polled by the hedge fund data provider in May felt they were getting sufficient portfolio transparency across their hedge fund portfolios. Asked if they felt hedge fund transparency had improved in the past three years, a full 96% said yes.

Of the investors surveyed, 78% told Preqin that since the financial crisis they were looking more closely at the underlying investments in hedge funds in which they invest, while 22% said they’d made no change in their due diligence practices.

So adamant have institutional investors become about transparency, 84% said they would not invest in a hedge fund that failed to meet their requirements. Those requirements, according to the Preqin survey, included breakdowns of hedge fund portfolios by sector or industry (65%), profit and loss attribution (60%), geographic breakdowns of the portfolio (60%), names of top five positions (54%), and full position level transparency on a time-lagged basis (54%).

Another 23% of respondents were even more demanding, requiring real-time access to hedge fund portfolio positions.


In Depth

Q&A: Decathlon Capital On Revenue-Based Alternative Lending

Oct 30 2017 | 3:49pm ET

The explosion in private credit activity since the end of the financial crisis is...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Saxby: Not All EBITDA Is Created Equal

Nov 30 2017 | 8:02pm ET

Record levels of dry powder are driving competition among private equity firms to...