It’s no surprise that hedge fund executives are expecting increased regulation under a Democratic-controlled Congress and the incoming administration of President-elect Barack Obama. A new survey by the CPA Firm Rothstein Kass and distributed by PR Newswire reports that 98% of partners in hedge funds expect tighter restrictions and that there will be an associated rise in compliance costs that will make hedge funds more expensive to operate, as a result.
The main areas where increased regulation is expected to take place, according to survey respondents, include:
— Asset Valuations 84%
— Counterparty Risk 84%
— Capital Raising 80.8%
— Transparency 77.3%
However, on the positive side, those surveyed felt that these changes may not lead to more fund closures or fewer start-ups being funded.