Phil Niles This article was authored by Phil Niles, Canada-based Director at Butterfield Fulcrum, an independent fund administration company.
Coming out of the credit crisis, and especially following the fraudulent activity of Bernie Madoff, increased investor transparency became a major requirement, most notably for large, institutional investors. Over the last few years, this has extended from a concern of simply the largest investors to be shared by all members of the alternative investment community. To handle the matter, fund administrators began to introduce independent transparency reporting to investment managers and the investors they serve.
This trend towards administrator-provided transparency reporting looks to continue into 2013 and, potentially, take on greater importance. The alternative investment world is becoming increasingly complex as regulatory reporting and investor demands escalate further than ever before. Such reporting has the potential to materially simplify the due diligence process, attract more capital to the industry, and promote greater openness and confidence.
Broadly speaking, this initiative is geared towards independent reporting to hedge fund investors concerning a few of the major areas that are typically covered in due diligence requests. This would include a confirmation of assets and liabilities, pricing sources, counterparty exposures, and diversification information. The idea is ......................
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