The Alternative Investment Management Association (AIMA) is to publish a global best practices guide for fund of hedge fund managers.
The guide is set to be published in early 2009 and will focus on areas including: risk management, disclosure to investors, valuation, management of conflict of interest and operational issues.
AIMA says it will be a practical business tool for fund of hedge fund managers and will also aim to offer insightful and relevant information for the investor, regulatory and political communities as well as the hedge fund industry’s service providers.
The guide will be produced and overseen by a steering group of key fund of hedge fund managers who between them control $150bn of assets worldwide.
“There are currently no dedicated guidelines for fund of hedge funds managers, yet the majority of new institutional investors tend to favour this investment route rather than investing directly in hedge funds,” says Andrew Baker, deputy CEO of AIMA and a member of the steering group.
According to Hedge Fund Research, global hedge fund assets grew from approximately $1,426bn at the end of 2006 to $1,875bn at the end of Q1 2008. The number of funds of hedge funds also grew from 2,220 to over 2,600 during the same period, as investors were attracted to the industry’s diversification and performance characteristics.
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