Hedge fund definition presents a catch-all concern
The recently announced industry standard for defining a hedge fund presents a catch-all concern to unaware fund managers.
With the release of Regulatory Guide 240 'Hedge funds: improving disclosure', some fund managers may be shocked to find they are, by the Australian Securities and Investments Commission's (ASIC's) definition, operating as a hedge fund, Zenith Investment Partners head of alternatives research Daniel Liptak said.
Some infrastructure, property, real estate and agricultural managed funds currently meet at least two of the five criteria that constitute a hedge fund, which includes any managed fund that uses leverage, derivatives and short-selling.
According to Liptak, funds that are flagged by ASIC may be treated differently by platforms.
"For investors there's two possible outcomes - they'll either run a mile or they'll say, 'well we've been in a hedge fund all this time and nothing has gone wrong', so it (the definition) could be a positive," he said.
The disclosure requirements themselves could also be a positive outcome for domestic operators because most will be able to meet the principles - albeit with minor changes to their existing systems - while offshore funds with large institutional clients may struggle.
Recommended for you
AUSIEX has announced it will acquire FIIG, a specialist fixed income provider with $4.5 billion in funds under advice.
Platinum Asset Management has announced it is in discussions with a global alternatives fund manager regarding a possible merger to create an $18 billion firm.
JP Morgan Asset Management has appointed an ETF specialist from Vanguard as it seeks to expand its ETF range.
The alternative asset manager has expanded its Singapore office with a head of Asian distribution, representing a “critical step” for the Asian business, where it is seeking to launch new offerings.
