Tue, Mar 31, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Opalesque UCITS intelligence

Legal Brief - THE COST OF COMPLIANCE published by AIMA with KPMG and MFA.

Tuesday, November 05, 2013

The report is the biggest ever global hedge fund survey, covering 200 managers managing more than $900 bn in Europe, Asia and US.

The report examines the extent to which the industry is investing heavily in the infrastructure of regulatory compliance.

My selected key findings in this report:

  • The hedge fund sector is making great efforts to achieve compliance. It’s part of a broader picture of managers building their infrastructure in order to attract more institutional capital.
  • Operating costs dedicated to regulatory compliance represent an average 7% of operating costs.
  • Few managers pass these costs to investors and therefore regulation impact margins.
  • Barriers to entry for the industry are being raised because the cost of that compliance disproportionately impacts smaller managers.
  • Regulatory constraints have a major impact on business strategy, especially for the big firms.
  • AIFM and SEC registration are perceived as the more costly regimes.

More importantly, according to the survey, two types of attitude will emerge : 48% consider changing their operating model and the other half not. There was no real variation of this split across firm size or regions. Certainly the bigger firms have or will develop their legal and compliance capabilities as the smaller firms are more likely to continue to outsource their operating model.

In term of product development, the reports outlines a general view that « Products are driven by client demand not by regulation ». Nevertheless, client demand is more and more driven by their own regulatory framework.

The report can be downloaded on aima.org - kpmg.com - kpmg.com



 
This article was published in Opalesque UCITS intelligence.
Opalesque UCITS intelligence
Opalesque UCITS intelligence
Opalesque UCITS intelligence
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. Other Voices: Does the hedge fund industry benefit society?[more]

    This article was authored by Don Steinbrugge, Chairman of Agecroft Partners, a US-based global consulting and third party marketing firm for hedge funds. It is no secret that the hedge fund industry is viewed negatively by a la

  2. Private credit comes into focus for investors[more]

    Bailey McCann, Opalesque New York: As investors look for a way out of the low yield/no yield environment, private credit is becoming an increasingly attractive asset class, according to a white paper from Bayshore Capital Advisors. Private credit has grown steadily since the financial crisis as

  3. M&A - Hedge funds no longer attractive targets for banks, reinsurers, Blackstone buys stake in Christopher Pucillo’s Solus event-driven hedge fund[more]

    Hedge funds no longer attractive targets for banks, reinsurers From Institutionalinvestor.com: Swiss RE, the world’s second-largest reinsurer, is looking to sell its 15 percent stake in Jersey, Channel Islands–based hedge fund firm Brevan Howard Asset Management. Morgan Stanley reported

  4. Opalesque Radio: Threadneedle expects continuing equity volatility this year[more]

    Benedicte Gravrand, Opalesque Geneva: Investors should expect more volatility, which is signaling a "slow moving" top to the market, KKM Financial’s founder and CEO Jeff Kilburg told CNBC on Monday. And this volatility is going

  5. Hedge funds show strong performance of 2.52% so far in 2015[more]

    Komfie Manalo, Opalesque Asia: The hedge fund industry got off to a strong start in 2015 "completely unmindful" of the poor performance last year, according to data provider Preqin. According to Preqin, following a year which saw the average he

 

banner