22 January 2008

Hedge Fund Working Group publishes industry guidelines

The Hedge Fund Working Group has published its best practice standards for hedge fund managers. The body of voluntary standards includes recommendations for managers to adopt an independent process for valuing portfolios and to put in hand robust governance of funds. The report also recommends enhanced disclosure to investors and that managers should have a comprehensive framework to manage risk - an important area in the context of financial stability.

Compliance with the hedge fund standards will be voluntary and will operate on a ‘comply or explain’ basis.

The HFWG, comprising 14 leading hedge fund managers based mainly in London, was set up last year in response to concerns both about the growing impact of hedge funds and financial stability. The standards aim to address these and other issues through increased disclosure to investors and other counterparties.

The group of 14, mostly London-based, hedge fund firms said the guidelines included recommendations for managers to adopt an independent process for valuing portfolios and to implement a “robust” governance for funds to handle conflicts of interest between managers and investors.

Press release

HFWG Report

HFSB Standards

© Graham Bishop