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From the Opalesque team:

Hedge fund investors saw their demands take hold for the first time during 2009 as assets draining from the industry provided them with leverage to negotiate for better investment and transparency terms. Their focus for change touched upon:

• Fee reductions (or claw back provisions on performance fees)
• Making managed accounts more widely available
• Increased use of third party administrators
• Increased transparency on portfolio positions
• Better liquidity terms
• Transparency on hedge fund director qualifications and responsibilities

"A key point for investors is to be more strict than in the past and recognize the importance of corporate governance, operations, and extended due diligence. With structured guidelines that cover all these aspects, people investing into hedge funds will do well," Estenne said during the Roundtable discussion.

Evaluations on a case-by-case basis Although managers are now more likely to be evaluated on more than just performance, solid returns in 2009 allow them to make counter arguments to demands on reduced fees and increased transparency.

Louis de Pfyffer, Pa......................

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