The hedge fund industry continues to grapple with an environment of change and uncertainty. The trend towards increased institutionalization of the sector continues, bringing even greater focus onto the due diligence, risk management and transparency management processes of funds and their managers. At the same time, the regulatory environment has continued to shift which has created not only uncertainty and complexity, but also significant costs.
The industry commits to compliance
Managers seem to be bearing the increased cost of compliance rather than passing costs on to their funds and, ultimately, their investors.
Exploring the cost of compliance
The industry has spent much time talking about compliance around the world. Yet there is scant data to properly compare and correlate the true cost – in resources, time and money – of the different regulatory requirements.
The impact on operating models
According to the data, two fairly equal camps are starting to emerge – those that will use regulatory change to proactively transform their operating models and those that would prefer to react to change as it happens.
The impact on product development
The changing regulatory landscape has long influenced product development decisions. In this chapter, we examine the current market for US “40 Act” and UCITS funds and explore what this may tell us for the future.