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Alternatives standards body rebrands to capture industry, investor evolution

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The Hedge Fund Standards Board (HFSB) has taken on a new name to reflect the evolution of the alternative investment industry and changes in terminology and approaches applied by investors.

The standards-setting body has changed its name to the Standards Board for Alternative Investments (SBAI).

It said this reflected the fact that alternative investment managers increasingly offer their investment strategies through a variety of vehicles beyond “hedge funds”, including liquid alternatives, regulated funds, co-investment vehicles, drawdown funds and managed accounts.

“At the same time,” it said, “investors have moved away from the ‘hedge fund’ term as they classify and integrate a diverse array of alternatives strategies by underlying asset class, return profile, market exposure or liquidity.”

Many of the SBAI’s standards and guidelines were applicable to asset management beyond just alternatives managers, it added. 

Dale West, senior managing director at the Teacher Retirement System of Texas and trustee of the SBAI said: “From an investor perspective, the standards contain core principles that apply to all types of investment management activities, not just those organised as hedge funds. 

“The name change positions the SBAI to engage more broadly with investors, regulators and the industry to address emerging issues.”

The HFSB was established in 2008 as the successor to a hedge fund working group set up by leading alternative investment managers to develop industry standards in areas such as disclosure, risk management, governance and shareholder conduct.

It is supported by around 200 alternative investment managers and institutional investors with $3trn (€2.5trn) in aggregate capital. 

It is governed by a board of major investors and managers. Asset owner trustees include Bruce Cundick, CIO at Utah Retirement Systems, David George, head of debt and alternatives at Future Fund Australia, and Kathryn Graham, head of strategy and co-ordination at the UK’s Universities Superannuation Scheme. 

Investors joining the SBAI over the last 12 months included Air Canada Pension Investments, Alaska Permanent Fund Corporation, CB Permatrust Asset Management, Japan Post Bank, Morgan Stanley Investment Management, New Jersey Division of Investment and Pennsylvania Public School Employees’ Retirement System.

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