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From Kirsten Bischoff, Opalesque New York:
Increased investor demands for transparency and reporting requirements from regulatory agencies are a headache for hedge fund managers, but the brunt of these new demands are being felt by fund administrators. The administration industry struggles from being one where staffing typically has to stay in line with assets, while levels of service (i.e., reporting) need to remain the same regardless of assets. So, over the past two years as those reporting requirements increased and asset bases decreased, administrators felt the squeeze of having fewer employees, yet needing to provide the same or higher levels of service to their hedge fund clients who needed better reporting to appeal to investors. This caused the loss of several administrators and consolidation amongst others.
Now, as hedge funds begin to recover assets and reporting requirements continue to rise (a recent SEI/Greenwich Associates poll showed institutional investors are ready to embrace hedge fund investing but have high expectations for transparency) fund administrators will be faced with a "one-two punch" that will mean much higher competition for assets coming back into the industry. Hedge fund managers looking to take part in the expected inflows from institutional investors will need to offer higher levels of transparency, and will be re-evaluating their administrators from this perspective.
"Suddenly as fund advisors are anticipating SEC r...................... To view our full article Click here
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