Hedge Fund Group Proposes Tighter Standards, Voluntary Watchdog

Jan 22 2008 | 1:03pm ET

A British hedge fund group has proposed sharper standards for the industry, including a watchdog to oversee compliance with the new voluntary guidelines.

The Hedge Fund Working Group, which includes representatives from 14 of the U.K.’s top hedge fund managers headed by former Bank of England Deputy Governor Andrew Large, issued its final report today, which includes tougher standards for asset valuation. It implores hedge funds to use third-party valuations where possible; at a minimum, it stresses that valuation and portfolio management should be handled by separate people.

It also codifies best practices on disclosure, governance, risk and shareholder conduct. In particular, hedge funds should offer more information about the amount of leverage used.

Hedge funds signing up to the voluntary code will either promise to comply, or explain why they cannot.

The report also proposes a Hedge Fund Standards Board, which will promote the best practices code, to be funded by the industry. Large estimated that the board would need £500,000 per year, financed by participating hedge funds, likely on a sliding scale based on size. Fauchier Partners founder Christopher Fawcett, who is also chairman of the Alternative Investment Management Association, was named a founding trustee of the new group. Other trustees are expected to be named from the hedge fund industry.

The HFSB would not have any regulatory function, nor would it be empowered to punish hedge funds that contravene the voluntary standards.

RELATED LINKS 

Final Report from the Hedge Fund Working Group


In Depth

Q&A: Neil Azous Talks Global Macro Investing

Nov 24 2014 | 12:41pm ET

Neil Azous is the founder and managing member of Rareview Macro, an advisory firm...

Lifestyle

Griffin Selling Chicago Apartment

Nov 26 2014 | 11:40am ET

Citadel Investment Group’s Kenneth Griffin is making clear to his estranged wife...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.