According to its press release, the company’s survey earlier this year showed that all fund of hedge funds respondents said there would need to be further transparency in a hedge fund manager’s operations to attract more investors in the future. Additionally, 69% of respondents felt that failure to address transparency concerns would hinder growth of the market.
The pan-European survey explored the effects that changing investor profiles and increased institutional assets are having on the European hedge fund industry, the release said. The survey revealed that 80% of respondents think increased participation by institutional investors will bring increased regulation and standardization to those managing assets. Almost half (46%) of those surveyed said they would welcome increased regulation.
Around three quarters (76%) of firms interviewed that target the institutional market said they are already instituting or will be instituting a high level of standardization. In contrast, only about a third (32%) of all survey respondents were against further regulation and standardization, and most of those were firms serving high net worth investors.
Marc Russell-Jones, Vice President of Global Fund Services at Northern Trust, said in the release that 99% of hedge fund and fund of hedge funds managers said they outsource their custody and fund administration services to a third party, enabling them to focus more on portfolio management and operational oversight.
The white paper, “Forced” Institutionalisation of the Hedge Fund Industry, may be obtained by emailing Russell-Jones at email@example.com .