PwC Survey finds hedgies report more frequently than most other alternative asset managers
| Jun 9th, 2008 | Filed under: Hedge Fund Industry Trends, Private Equity | By: Alpha Male |
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Think hedge funds are secretive? Think they do their best to communicate with investors as little as possible and get visibly upset when investors call? You’re not alone. Stereotypes of the super-secret hedge fund abound. But in the absence of specific regulation, how much transparency is enough? As the Journal of Wealth Management once wrote:
“Hedge fund transparency is like pornography–it is hard to describe, but you know it when you see it. A great debate currently rages over the extent to which hedge funds should disclose their investment portfolios. Advocates of transparency argue that hedge fund managers should be held to the same standard of disclosure as their other investments.”
So are hedge fund managers “held to the same standard of disclosure as other investments”? According to an extensive survey of hedge, private equity, real estate, infrastructure and commodity funds released last month by PwC, they may actually be. In fact, the survey finds that hedge fund managers report more frequently than managers of other alternative assets.
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Frequent reporting is good. Too bad that it may not be accurate and in worse case, just fabricated. That’s not exactly transparency.
If a manager is not willing to provide adequate transparency then don’t invest or if already invested, redeem. If all investors followed this simple rule instead of chasing returns, there’d be no need to complain.
Frequency is one aspect of a manager’s reporting. It does not equate to transparency.