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New Managers January 2014

SCOTSTONE COLUMN: The year of the return of investors


Ian Hamilton

This column is authored by Ian Hamilton, who is the founder of IDS Group. IDS provides fund administration services in Africa and Europe through Malta. He is also the founder of Scotstone Investments, a company that has fund structures and services for global emerging new managers. Is 2014 going to be the year of the return of investors to hedge funds?

2014 is in full swing and with it comes a new round of regulations being imposed upon the hedge fund industry. Life for a hedge fund manager is no longer an easy environment to operate in; fund managers are having more and more to divert attention away from managing money to all the slew of compliance and reporting under the new regulations.

It is an unfair situation as fund managers should be concentrating on what they are best at; managing money. Diverting attention can impact upon performance and this is not in the interest of investors.

Is all the new regulation and reporting requirements necessary?

Yes and no. Much of it stems from governmental paranoia concerning systemic risk to economies. But frankly as proved in 2008, systemic risk lay within the banking industry, not the hedge fund industry. In 2003 in a paper prepared by AIMA in South Africa for the South African Minister of Finance, it was pointed out that is where the danger lay. However, this was disregarded as he subscribed to the International Finance club of hedge fund witch hunters. Luckily South African hedge fund managers were protected from most of the 2008 fall out because of little exposure to international events.

Regulating the industry to ensure more transparency is possibly a good thing and in the interests of he......................

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.
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