27/04/2010
Better governance could increase allocation to hedge funds
According to a survey by RBC Dexia Services Investor Services of 57% of the world’s hedge fund managers, of which 42% manage more than USD1bn in assets, 61% of respondents are of the opinion that better governance in alternative investments could result in higher levels of allocation to this asset class, which would lead to the launch of a “significant” number of new funds, both offshore and onshore, within a few months. The survey defines governance to include structural issues, independent valuation, transparency and third party control. The influence of regulation on the choice of domicile for funds is a key question for large managers. 92% of the managers surveyed who have assets of over USD1bn admit that regulatory questions are important in the choice of domicile, while the percentage is limited to only 64% of managers with assets of less than USD1bn. Among those surveyed, 49% are planning to launch onshore funds, and 40% are planning launches of offshore funds. As to how they would react to new rules imposing stricter governance requirements, 40% of respondents said they would be obliged to hire personnel, while 35%, largely whose with less than USD1bn in assets, are planning to outsource.
