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Regulatory regime tipped to alter hedge fund landscape

Date: 19 Jan 2010

Stringent regulatory requirements could make hedge funds more expensive to manage and may force firms to change location. A research house has picked potential winners and losers among industry strategies this year.

Keywords (click to search): [hedge funds] [Lipper] [Aureliano Gentilini]

Leigh Powell
This year may see major changes in the regulation of hedge funds, potentially forcing a change in the geographical mapping of management firm, a research house has stated.

Aureliano Gentilini, global head of hedge fund research at Lipper, a Thomson Reuters company, notes in a new report that the cost of complying with more stringent regulatory requirements could make hedge funds comparatively more expensive to manage.

“At the same time pressures from institutional investors to reduce hedge fund fees will continue,” he wrote in a 2010 industry outlook.

“A clear trend towards significant changes in regulation might be observed, and changes in the mapping of geographies in hedge fund management companies will occur throughout 2010.”

Further, Gentilini believes significant steps towards instituting a central clearing house for over-the-counter derivatives and credit default swaps (CDS) could be seen this year.

Overall he expects market conditions to be more difficult in 2010...

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