Tuesday, 29 July 2014
Last updated 2 hours ago
May 21 2012 | 8:24am ET
Institutional investors have demanded—and received—increased operational sophistication and transparency from hedge funds, according to a new report from advisory firm KPMG and the Alternative Investment Management Association, a hedge fund lobby group.
The report (“The Evolution of an Industry”), based on in-depth interviews of 150 hedge fund management firms with combined assets of $550 billion, found that 76% of respondents had observed increased investments from pension funds since 2008. Institutional investors in general (including funds of funds) accounted for 57% of all assets under management.
A full 90% of respondents reported increased demand for due diligence since 2008 and 84% said they had increased transparency for all investors post-crisis. Moreover, the majority of firms have hired staff members to respond to increased investor demands.
The report says that 98% of respondents have increased their investments in regulatory compliance since 2008.
Said Robert Mirsky, lead partner for hedge funds at KPMG in the U.K., in a statement: “The combination of an increase in regulation, the changing nature of the investor base, and the natural evolution of the business has made the industry nearly unrecognizable from only five years ago.”
The report is the second in a two-part series on the state of the global hedge fund industry. The first, published in April, looked at hedge fund industry performance, risk and volatility.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…