The report, entitled “The Evolution of an Industry”, is based on a survey of, and in-depth interviews of, 150 hedge fund management firms globally with more than $550 billion in combined assets under management. It found that hedge fund management firms have increased their operational infrastructure in areas like investor transparency and regulatory compliance as allocations from institutional investors have increased.
76 per cent of respondents have observed an increase in investment by pension funds since 2008, while institutional investors as a whole, including funds of funds, accounted for a clear majority (57 per cent) of assets under management.
The report finds that the increase in institutional investment has led to more thorough due diligence and greater demands by investors for transparency, with 90 per cent of respondents reporting an increased demand for due diligence since 2008. 84 per cent of all respondents indicated they had increased transparency to investors since 2008, which is reflected by the fact that the majority of firms have taken on multiple members of staff to respond to these increased investor demands.
The report also found that hedge fund management firms had almost universally increased investment in regulatory compliance since 2008, with 98 per cent of firms hiring additional staff in this area.
“Institutionalisation has been described as the continuing inflow of new institutional capital into the industry, but as this report demonstrates, it is also about the increasing sophistication of operational infrastructure with respect to transparency, compliance and due diligence”, said Andrew Baker, AIMA’s CEO.
Robert Mirsky, lead partner for hedge funds at KPMG in the UK, commented: “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 unrecognisable from only five years ago”.
Press release
Full report
© AIMA - Alternative Investment Management Association
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article