Hedge funds reinvent themselves

New York and London-based hedge fund managers are returning external money to investors and restructuring as family offices in a bid to avoid regulatory scrutiny. Single family offices are exempt from Dodd-Frank regulation in the US and the Alternative Investment Fund Managers Directive in Europe, which aim to improve investor protection. Both sets of regulation have raised compliance and reporting costs for hedge fund managers . . .(source infra)

Hedge funds copy Soros’s regulatory sidestep - FT.com: "The lawyer estimated that hundreds of London-based fund managers may choose to take this route in order to “reinvent themselves and avoid all of the additional regulation”. Mr Donovan-Smith said the motivation for these hedge funds was to avoid increased costs, rather than resistance to providing extra disclosure." (read more at link above)

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