Hedge funds have been catching up

December 14, 2010 | In: Investment News

Hedge funds are no longer in purgatory yields, according to a recent survey by Ernst & Young.

“In 2008, in the heart of the financial crisis, almost half of hedge funds that were included in our survey had reported yields of 10% or less. In 2009, 45% of them have achieved efficiencies over 20%, “says Leon Chin, partner at Ernst & Young.

The survey also reveals that institutional investors such as hedge fund managers, expect that the additional regulation will be imposed on the industry itself is rather unfavorable.


Managers of hedge funds say they are very worried about the consequences of these new rules work. For their part, investors expect greater transparency on the part of managers.

The impact of the crisis

The survey reveals that the financial crisis has changed the work styles of hedge fund managers. Among those who have imposed restrictions on redemptions during the height of the crisis, 45% have deleted. Managers the most important were the first to do so.

Also, nearly 45% of hedge funds have changed their fees charged to investors and their restrictions on liquidity to attract new investors.

Over 40% of institutional investors surveyed said they pressured the managers of hedge funds so they cut their fees. The sounding shows that for 25% of investors, increasing transparency is the most important factor in hiring a manager of hedge funds.

The survey by Ernst & Young was conducted with 104 managers who manage assets of 585 billion U.S. dollars. In all, 53 institutional investors surveyed were managing assets of 260 billion U.S. dollars, and over a quarter of them were clients of hedge funds.

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