AIMA says hedge fund transparency lacking
GLOBAL- Research by the Alternative Investment Management Association and Capital Market Risk Advisors into the hedge fund of funds industry suggests that although investors remain wary of investing due to a lack of transparency, hedge fund managers are convinced they are providing enough disclosure.
Only 7% of fund of funds and 4% of individual hedge fund managers suggested they have had potential investors decide not to based on a lack of transparency. 64% of investors, on the other hand claim a lack of transparency has tipped the balance and led them to shun hedge fund investments.
86% of investors say transparency is an issue in selecting hedge funds and almost one in three investors have had requests for information turned down by the funds in which they invest. Seven out of ten investors are satisfied with the information they receive from their hedge funds.
According to the report, there is evidently a communication breakdown between investor and manager- 57% of hedge funds say they provide full details of their positions, information only 13% say they receive.
Similarly, 95% of investors regularly request information from their fund of funds on the percentage of assets in each fund but the research says only 29% routinely provided this when asked.
Results on transparency are the first part of an extensive AIMA report that covers a range of issues including liquidity, performance, risk and risk attribution and fees. Publication is due this summer.