2013 global hedge fund and investor survey

Regulation and compliance

  • Share

The new regulatory landscape has created new challenges for the hedge fund industry. Managers have responded by finding ways to strike a balance between growth and the costs of compliance.

Regardless, the industry regards the topic in a harsh light. Managers see regulations as adding costs but failing to ease concerns of systemic risk and delivering only minimal benefits to due diligence processes.

EY – Perceived benefits of hedge fund regulations

Hedge funds and investors

Using a scale of "1=not at all beneficial" to "5=extremely beneficial," to what extent do you believe the hedge fund regulation(s) will benefit investors in the long term?

EY – Perceived benefits of hedge fund regulations

Hedge funds and investors

Using a scale of "1=not at all beneficial" to "5=extremely beneficial," to what extent do you believe that hedge fund investors would benefit from greater global harmonization of regulations?

EY – Perceived benefits of hedge fund regulations ×

Investors have a similar perspective. Most say regulations on hedge fund reporting have had no beneficial impact on their due diligence processes.

Respondents are increasingly concerned about the extraterritorial nature of regulations – AIFMD and FATCA, for example. European managers feel the pressure most sharply; more than half expect adverse effects from extraterritorial regulations.

Also, more than half of managers and investors say that global harmonization of regulations would be beneficial.

“AIFMD will affect my selection of managers and my allocations to hedge funds because I will have fewer funds to select from and fewer options overall.”

Investor, Europe