The launch of two new internet-based initiatives promises to offer greater transparency to the world ...
Plusfunds.com's initiative is supported by Ernst & Young and Standard & Poor's. Funds will provide details of their portfolio holdings to S&P for daily evaluation.
The ratings agency will issue valuations and risk profile, while maintaining secrecy as to the exact nature of the portfolio holdings.
The models, using technical support provided by Ernst & Young, will assess the changes in NAV, with a number of updates per day. Risk profiles will be updated daily.
A further step is the collusion of the Bermuda Stock Exchange, which will provide a listing and trading platform for securitised hedge fund shares.
William Woods, CEO of the BSX, said: "The BSX will provide the fully electronic trading platform and will regulate the trading in this market place. This will help develop the infrastructure to address the transparency and liquidity needs of the alternative investment industry."
Sanford Bragg, executive managing director of S&P Fund Services, said: "S&P is committed to being the world's pre-eminent provider of risk information. Hedge fund investors will receive more comprehensive information on the risks as well as the rewards of their investments."
So far only 35 hedge fund managers have signed up for the service, but PlusFunds.com CEO Christopher Sugrue believes many more subscribers will be on board by the launch date of 1 March. He believes many multi-managers will insist their underlying hedge fund holdings subscribe as an overall risk control.
Tuna Group LLC and HedgeFund.net has also announced it will launch a web-based platform to report daily returns of hedge funds.
Alex Shogren, CEO of HedgeFund.net, said: "Daily reporting will provide a comfort level to significantly more sophisticated investors from around the world."
Brokers will provide direct feeds of portfolio gains and losses direct to the site. The system will have a built-in system of checks whereby the broker, administrator, manager and investors will be notified if gains or losses fall outside a certain range.
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