Deutsche Bank study shows hedge funds addressing new regulatory hurdles
Deutsche Bank today identified how hedge funds are adopting a wait-and-see approach to compliance with regulation due to the complexity of workload involved, whilst legal, compliance and regulatory matters now rank as the top contributor to their non-investment workload.
Deutsche Bank’s Hedge Fund Consulting Group’s survey of European and US hedge fund managers shows almost a quarter of US hedge fund COOs have seen an increase of up to 75% in the amount of time they dedicate to such issues.
At the same time, hedge funds are taking a wait-and-see approach to compliance with the Alternative Investment Fund Manager Directive (AIFMD), with 82% of European managers intending to delay registration until 2014.
Further highlights of the survey include:
- Marketing to European investors continues with 35% of European and 43% of US managers choosing to utilise transitional marketing provisions.
- The amount of time COOs globally dedicate to legal, compliance and regulatory matters has increased significantly - by up to 50% - over the past two years for the majority of managers surveyed.
- The majority of managers globally estimate their non-headcount related costs have increased by up to 25% over the last two years.
- More than 40% of managers have hired more than one non-investment full-time employee to help prepare for and manage new regulatory requirements.
- 39% of managers are uncertain whether AIFMD will bring additional investment from institutional investors.
Daniel Caplan, European Head of Global Prime Finance at Deutsche Bank, said: “The crucial role played by hedge fund COOs has been brought into sharp focus as the regulatory workload continues to mount, and this report provides a valuable insight into how this function has evolved to meet today’s increasingly complex demands.”
The survey polled 44 European and US hedge fund managers representing over $325 billion in assets under management.
Study "Hedge fund COOs rise to new regulatory hurdles"
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