The hedge fund sector continues to grow rapidly, attracting a broader range of investors and increasingly extending its presence beyond the US into Europe and Asia.
It is estimated that hedge fund assets under management have surpassed the US$1 trillion mark, with the proportion in Europe rising from around a fifth in 2004 to a quarter by the end of 2005. The development of hedge funds in Europe includes the increasing adoption of some of the less common strategies already seen in the US such as loan origination, trading carbon credits and investing in reinsurance assets.
However, regulation of hedge funds still varies markedly between different territories. As the sector matures and attracts new retail and institutional investors, the attention of regulators is likely to increase. Hedge fund managers may need to take a fresh look at their risk appetite, their governance and operational structures and how they communicate with investors, regulators and other key stakeholders. As the asset classes that are traded become more complex and diverse, managers may also need to review how they structure their funds for regulatory and tax purposes.
PricewaterhouseCoopers’ audit, tax, consulting and legal experts can help hedge fund managers to meet the challenges and realise the opportunities opened by the growth in the sector. This includes advice and support in establishing operations, managing complex and structured financial instruments, tax planning, risk management and regulatory compliance.
