State Street white paper shows that HF “regulation” doesn’t just come from governments
Jul 1st, 2009 | Filed under: Today's Post
Notwithstanding conciliatory overtures coming from hedge fund trade groups, many hedge funds remain nervous about the drumbeat of greater regulation. And if governments can’t pull it off, then investors seem more than eager to take their place – acting as a form of informal regulator that could rival or even exceed government oversight. Whether formal or informal, a more tightly monitored industry means opportunity for those who administer these funds.
State Street, for example, believes that Hedge Fund Industry 2.0 will demand the kinds of service offerings it has built up over the past decade. In a white paper released today (available for free here), the firm says:
“In the next phase of the hedge fund industry, investors are almost certain to demand independent custody of their investments. They will require complete clarity regarding accounting of their funds and the transfer/withdrawal of assets. They will likely demand independent asset valuations and portfolio pricing, particularly for less liquid assets, along with third-party risk analysis and stress-testing.”
The firm cites the results from its annual survey of institutional investors (see related post) that shows what they believe will be the result of the current turmoil: More…
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