New Views of the Hedge Fund Industry…

From our good friends at State Street, here comes their latest report on the Hedge Fund world.

Two major trends are emerging in the hedge fund industry with far-reaching impacts: a migration among the maturing hedge fund industry to third-party administration, custody and specialized services, and the most comprehensive reconsideration of financial regulations in generations. Today’s institutional investors need to understand the ramifications of these trends and participate in shaping the new structure of this critical, but evolving industry.

The global financial crisis is bringing about an evolution in hedge funds that will render significant changes to the industry. Record investment losses and investor withdrawals have cut assets under management by more than one-quarter, consolidation is under way, and both investors and regulators are calling for greater transparency.
The Evolution of an Industry

Two major trends that will have far-reaching impacts are emerging: a migration among the maturing hedge fund industry to third-party administration, custody and specialized services, and the most comprehensive reconsideration of financial regulations in a generation. According to State Street’s annual hedge fund study conducted in October 2008, 84 percent of institutional investors surveyed expect more frequent disclosure of hedge fund positions, while 49 percent anticipate more frequent reporting.

Before the dust from the crisis settles, it will be important for all of the stakeholders in this market to understand the ramifications of these trends and to participate in shaping the new structure of this changing industry. Though forever altered by current market conditions, hedge funds will retain their critical and proven role in institutional investors’ financial portfolios.

You can download the full Document here.

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