Standards ‘not very important’ to investors

Date: Monday, June 15, 2009
Author: Steve Johnson, FT.com

The majority of hedge fund investors remain unmoved by the industry’s own attempts to improve standards after the ructions of the past two years.

The Credit Suisse survey found 63 per cent of investors said it was either “positive but not very important” or “not at all important” for managers to sign up to the precepts of the Hedge Fund Standards Board or other industry bodies.

Only 2 per cent said adherence to industry best practices was a prerequisite to investing, with 35 per cent saying it was “very important but not essential”.

The HFSB was created last year to attempt to improve standards of disclosure, risk management, governance, shareholder conduct and valuation procedures across the industry. The voluntary code of practice currently has 53 signatories. Thomas Deinet, executive director of the HFSB, put a brave face on the findings. “Overall investors are positive, but membership alone is not enough for them. They also have their own standards of due diligence.”