Investors favour hedge fund standard adoption

Date: Tuesday, April 22, 2008
Author: Hedge Funds Review

Eight out of 10 pension funds favour a fund manager who has complied with the hedge fund best practice standards, according to a survey by KPMG. Investors were asked about the standards recently outlined by the Hedge Fund Working Group.

The survey also found that over half would require hedge fund managers to comply with the standards in three years. Over half of those surveyed also think self-certification is appropriate for the standards but want independent third party validation for greater assurance.

Valuation, risk and disclosure were the most important issues, said investors that the standards would address. Nine out of 10 said asset valuation was very important.

While investors think the standards are a good start for the hedge fund industry, they will still be looking for more assurance. Investors said other standards, including the Alternative Investment Management Association’s sound practices guide and the global investment performance standards were also “very important” or “quite important”.

KPMG commissioned an independent research company to interview pension funds, fund of hedge funds and investment consultants with total assets under management of around $400bn billion. The survey was conducted over a 10-day period in March 2008.