Fri, Jan 20, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

RBC Dexia poll: Greater governance to increase alternatives allocation as regulation drives domicile selection

Monday, April 26, 2010
Opalesque Industry Update - RBC Dexia Investor Services said today that a clear majority of hedge funds in its latest survey (61%) believed greater governance of alternative investments could result in an increased allocation to the sector, with a significant number of alternative fund launches – both on and off-shore – expected in coming months. The poll defined governance as including structure, independent valuation, transparency and third-party control.

After the recent financial tumult led to mass redemptions, a shift to increased regulation and transparency was inevitable. Interestingly, respondents were divided on the notion that increased regulation could affect asset allocation – just over half (52%) either thought it had no impact (40%) or had no opinion (12%). However a significant minority (30%) felt that greater regulation could lead to increased allocation in alternatives, while only 18% thought it would result in a decrease in allocation to the alternatives market.

But the influence of regulation on fund domicile is crucial for the largest investment managers and ongoing regulatory change is encouraging a growing number of managers to explore a wider range of domicile options than before. As many as 92% of those with assets under management of more than USD 1 billion agreed that regulatory influence was important in domicile selection, as compared with only 64% of those who had funds below this threshold. Just under half of the respondents (49%) were planning to launch new onshore funds with as many as 40% planning to launch new funds in offshore centres.

Greater governance was seen as more important than regulation and respondents expect it to result in an increased allocation to alternatives. When asked how they would manage a requirement for greater governance, 40% responded they would hire more staff. This is compared to the 35% (mainly those with assets under management less than USD 1 billion) that would outsource. As with greater governance comes greater cost, the smaller players will likely investigate third-party outsource solutions to satisfy this market need.

“The alternatives sector suffered during the recent turmoil, but our survey shows that good governance and more transparency will only increase the global appetite for these types of funds,” said Rob Wright, Global Head of Product & Client Segments at RBC Dexia. “Use of a specialist service provider has gained recognition amongst hedge fund managers since the financial crisis. And it is clear that they are in a position to enable funds to develop and implement new structures in an efficient and cost-effective way.”

Other findings from the survey include that 60% of respondents either ran or invested through managed accounts. When asked the main driver behind their managed accounts, the majority (47%) mentioned liquidity. This appears to be a direct result of the recent financial crisis, as managed accounts offer greater flexibility for managers and investors in comparison with the wave of redemptions at the peak of the crisis.

RBC Dexia surveyed a range of alternative asset managers to understand the key trends and opportunities facing the alternative investment market. The results reflect feedback from 57 respondents worldwide. In total 50% of respondents represented single manager funds, 39% funds of funds and 9% both. A significant 42% of respondents were handling assets under management worth USD 1 billion or greater. Respondents were genuinely global with 47% having their main location in Europe (40% continental Europe and 7% UK), 37% in North America, 14% in Asia-Pacific and 2% in the Middle East. The respondents were senior representatives of their organisations. Corporate website: www.rbcdexia.com

- FG

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - This hedge fund made 37% betting on banks in 2016 and remains bullish after the Trump rally, Hedge fund legend David Einhorn is making a big bet on GM, After impressive 85% return in 2016, hedge fund looks to Canadian gold producer, small banks[more]

    This hedge fund made 37% betting on banks in 2016 and remains bullish after the Trump rally From Forbes.com: Can bank stocks continue to rise after a 28% surge in the KBW Bank Index in 2016, fueled by a post-election rally as stock pickers returned to the beaten down sector? Forget the s

  2. SWFs - China sovereign wealth fund CIC plans more U.S. investments[more]

    From Reuters.com: China Investment Corporation (CIC), the country's sovereign wealth fund, is looking to raise alternative investments in the United States due to low returns in public markets, its chairman said on Monday. CIC will boost its investments in private equity and hedge funds as wel

  3. Some hedge funds strong start in 2017 nice contrast to 2016[more]

    With the 2016 HSBC Hedge Weekly performance rankings in the books - a year in which the same leader-board entries pretty much dominated unchallenged throughout the year - comes a new leader board that is a hard-scrabble mix of hedge fund styles and categories. What is clear after but a few short wee

  4. Macro hedge funds and CTAs outperform in December on strong dollar[more]

    Komfie Manalo, Opalesque Asia: The last month of 2016 saw risk assets climbing higher, as part of expectations that the new U.S. administration will remove barriers to growth and investment, Lyxor Asset Management said. December also saw the Fed hik

  5. Opalesque Exclusive: Roxbury credit events UCITS gathers more assets[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: The Roxbury Credit Events Fund, launched in September 2015, was up 4.24% in 2016, having returned seven positive months during the year. The managers raised