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By Benedicte Gravrand, Opalesque London:

At Axa's roundtable in the City of London on Wednesday, most speakers agreed that transparency, good governance, liquidity management and review of fees will be key ingredients to regain investors' confidence in the hedge fund industry; that funds of hedge funds (FoHFs) are one of the better vehicles to invest in hedge funds; and that the recent proposed EC Directive bodes "a plain bad" regulatory environment.

Regaining trust, overcoming suspicions The problem is not necessarily one of trust as indeed, many investors could not understand last year's negative performance and the general opacity of investment strategies made them suspicious. This is why the industry must become more transparent, said Henry Kenner, CEO of London-based multi-strat hedge fund Arrowgrass Capital Partners. The trend towards managed accounts - although not the right solution for all investors - does show investors' desire for more openness.

Arrowgrass does do what it preaches as it has been making components of its portfolio available online to its investors for a year now. Kenner also expects there will be more prescriptive information in Offering Memorandums going forward.

Expect claw-back trend That the crisis will bring the industry under more scrutiny is good, as at the end of this adjustment process, the general quality of hedge funds will have to be better. ......................

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