PwC alternatives alert, June 18, 2010

A second wind - the regulation, taxation and distribution of hedge funds around the globe is now available


A second windThe last few years have been challenging ones for hedge funds, with reduced returns and assets being coupled with an unrelenting focus on the hedge fund industry as a whole by investors, regulators, tax authorities and indeed the general public. With the advent of the crisis, regulators are also in the process of introducing more stringent tax and regulatory measuresare also in the process of introducing more stringent tax and regulatory measures.

So how will hedge funds react to the planned changes?
Despite the planned changes, hedge funds have proved surprisingly resilient with improved returns and assets returning close to all time highs. With increasing numbers of countries introducing bans on shorting, it is sometimes easy to forget the liquidity that hedge funds bring to markets, something very evident after the post 9/11 slowdown. The web based information that accompanies this document will provide guidance on the frameworks in place in different territories. While not much has changed since our 2009 paper ("Changing Rules"), we expect many tax and regulatory amendments in the next 12 to 18 months. With all change comes great opportunity and for an industry that has proven itself capable of innovation, the coming year could be a successful one and may well be the second wind for hedge funds, with proper planning and always assuming that no unforeseen financial storms lurk beyond the horizon.

To access the new white paper, a second wind - the regulation, taxation and distribution of hedge funds around the globe, click here.