Asset+ from DBFS - a solution to increased regulation in the Hedge Fund Sector

19 May 2009

It looks like increased regulation on an international level for hedge funds is inevitable. An EU proposal suggests that the managers of hedge funds and private equity will need to be registered, hold a minimum level of capital and provide regulators with information on the size and source of their borrowings, their exposure to illiquid assets as well as details regarding portfolio valuation methodology and custodian arrangements.

For many hedge fund managers this will not be welcome news. Performance fees in all too many cases have disappeared together with a hefty chunk of management fees as portfolio valuations have reduced due to the combined effects of a falling market and investor redemptions.

‘The solution’, according to David Upton MD of the DBFS Group, ‘is to resort to technology. Regulatory compliance and the requirements for increased investor transparency will place an added burden upon fund managers just at the time they least need it. Increasing headcount is expensive and does not always address issues such as the management of operational risk. Technology platforms like Asset+, on the other hand, can provide cost effective solutions that can actually free up time as much nugatory work is automated.’

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