Speaking to the European parliament's economic and monetary affairs committee, Mr McCreevy said the move is a response to supervision issues arising from the current financial crisis, as well as the G20's recent call for the development of best practice standards for private capital pools and hedge funds.
Among the issues that will be covered by the review are the adequacy of existing transparency measures, oversight responsibilities, risk management and the assessment of systematic risk.
The consultation will also look at the need for capital requirements and supervisory responsibility.
"We need to draw a clear distinction between hedge funds and private equity," Mr McCreevy told the committee.
The review is expected to launch by December 11th and stakeholders will be able to make submissions until the end of January. The results of the consultation will be discussed at a conference in Brussels slated for February 2009.
Prior to joining the European Commission, Mr McCreevy served as Ireland's minister of finance from 1997 to 2004.