In the wake of the worst year on record for hedge funds, hedge fund managers should expect to see wider-ranging and more in-depth scrutiny of operations and investment processes, according to a new report by SEI and Greenwich Associates. The report, “Hedge Funds Under the Microscope: Examining Institutional Commitment in Challenging Times” notes hedge funds fulfilling performance expectations and embracing transparency will be those that retain and capture assets.
“The silver lining for hedge fund managers is that institutions appear committed to hedge funds as an asset class,” said Phil Masterson, managing director for SEI’s Investment Manager Services division. “However, it’s not an unconditional commitment. Hedge fund managers must recognize and react to the changing expectations of their institutional clients. Greater transparency and enhanced client reporting and communications – along with fulfilling investor performance expectations – will be the pillars of a hedge fund manager’s success.”