The Asset – The topic of fund governance is moving quickly to the top of the agenda for investors in hedge funds. Institutional investors, now representing over 60% of the global hedge fund asset base, are in the driving seat when it comes to governance standards in alternative investment funds. In the wake of the 2008 financial crisis, they are asking managers to provide evidence that independent directors have been appointed to offshore fund boards, and that these directors are truly independent.
As the Asian hedge fund industry matures, we are seeing growing hedge fund firms with solid track records seeking to tap institutional capital pools, frequently using offshore funds in the Cayman Islands or via UCITS funds in Ireland or Luxembourg. It is important that aspiring hedge fund managers realize the higher standards of governance that investors now demand if they are going to succeed in building successful businesses.
