Hedge Fund Managers Expect More Regulations

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.

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