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Portfolio > Alternative Investments > Hedge Funds

IRC Surveys Industry on Transparency and Valuation

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NEW YORK (–Members of the International Association of Financial Engineers’ Investor Risk Committee are conducting surveys in preparation for a January meeting with regulators, the results of which will be discussed at its upcoming meeting.

The steering committee of the IRC is now circulating surveys on risk transparency and valuation practices to be filled out by hedge fund managers, hedge funds of funds firms, and other investors. The survey was created in response to the issues and developments at Beacon Hill with its mortgage-backed securities fund that had such stunning losses in such a short period of time. (Previous HedgeWorld Story)

While some of the basic questions surrounding transparency may be the same, each survey is tailored to get each industry participant’s viewpoint.

Hedge fund managers are asked about what types of information investors ask for in risk transparency reporting and what types of transparency they currently supply to investors and how often. For funds of funds, the questionnaire asks them to rank the usefulness of specific types of risk information such as Value at Risk, position level transparency and stress test results. Meanwhile, investors are asked whether hedge fund managers disclose the details of their valuation policies.

Organizations such as the Alternative Investment Management Association and 100 Women in Hedge Funds are distributing the surveys among their membership and encouraging them to attend the Dec. 10 meeting of the IRC in Boston. The meeting corresponds with the Riskinvest 2002 conference. The IAFE is allowing conference delegates to attend free.

At the meeting, officials plan to discuss the results of the survey and the first draft of the reporting requirements for hedge funds as divided up by strategy, said Leslie Rahl, who is the U.S. chair of the IRC.

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