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AIMA aims for greater hedge fund disclosure

Date: Thursday, August 16, 2007
Author: Chris Nicholls, Financial Standard

Amid the background of hedge fund collapses both locally and in the US, the Alternative Investment Management Association of Australia (AIMA) today released new risk disclosure guidelines for Australian hedge funds.  
The voluntary guidelines, developed by the AIMA regulatory committee over the past year, provide individual investors with more detail of key points such as how managers use leverage, liquidity of underlying assets and the fund and specific risk of particular investment strategies.

The guidelines also encourage investors to look beyond past performance when evaluating hedge funds and better standardise fee and cost explanations.

Chairman Kim Ivey said the guidelines aimed to improve information exchanges between hedge fund managers and investors, providing “even greater assurance of the industry’s transparency and professionalism.”  

While the guidelines were voluntary, “AIMA Australia strongly encourages members to take the guidelines into account in their documentation, such as the information memorandum or product disclosure statement,” Ivey said.    

With approximately 80 per cent of Australian hedge fund managers AIMA members, Ivey expected them to be widely adopted.