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.

There is daily global concern as to the possible extinction of many forms of wild life.

Rhinos are under threat, tigers, pandas and many others on a very long list of animals facing imminent extinction.

But does anyone stop to think that hedge fund managers are also threatened and may not be around in ten to twenty years?

"Hedge fund managers have long been considered creatures that should be hunted."

Hedge fund managers have long been considered creatures that should be hunted. Politicians started the row and then turned regulators on to the hedge fund industry. The result is that we have small and/or emerging hedge fund managers under threat with increasing regulatory hurdles that need big capital to overcome.

AIFMD is the EU classic, but now Switzerland has also joined the hunt with similar regulations that will be enforced by 2017.

It all stems back to the total lack of understanding as to what hedge fund managers set out to achieve - is the outperformance of a benchmark agreed to with investors. A hedge fund is a performance chaser and not an asset-gatherer like a long only or index manager.

But I am not going to continue to moan on and on about what we in the industry understand. It is regulators and critics of issues such as performance fees who do not want to comprehend. Raise the barrier to entry too high and the hedge......................

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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.