Will new hedge funds lose their edge under Dodd-Frank?

Published by Reuters Complinet
June 1, 2011

The hedge fund industry is likely to lose some of the risk and entrepreneurial approach that has attracted investors with an appetite for high risk and reward scenarios as a result of new rules being formulated in the US and Europe.

The biggest impact of new rules under Dodd-Frank and the forthcoming Alternative Investment Fund Managers Directive (AIFMD) in Europe, AIFMD regulations will likely make it much more costly for new and smaller funds to operate because of the reporting and compliance infrastructure requirements.

There are also a number of concerns about conflicts between the two sets of rules when they come in to play, especially for offshore funds and those funds interested in marketing to investors in both Europe and the US. Continue reading “Will new hedge funds lose their edge under Dodd-Frank?”