What hedge funds need to know to stay ahead of the curve
Changing investor demographics, pressure to boost investment
results while also cutting fees, increased competition and
the ramifications of potential tax reform will drive significant
changes in the hedge fund industry over the next few years.
Following are overviews of several key trends that will present
new opportunities and new challenges in the future.
Success for any hedge fund starts by growing assets under
management (AUM), and that means finding new investors.
Traditionally, funds focused on institutional investors and a
small pool of high net worth households. The recent explosion in
households with a net worth of more than $5 million, however,
provides a large new pool of potential investment capital,
but also raises new challenges. “This significant increase in
investment capital available from individual investors provides
opportunity for hedge funds focused on the individual market
and for funds looking to diversify beyond institutional investors,”
says Michael Patanella, Audit partner and national leader of
Grant Thornton’s Asset Management practice, “but it also raises
new marketing, operational and regulatory challenges.”
“This significant increase in
investment capital available
from individual investors
provides opportunity for
hedge funds.”
Michael Patanella, National Leader of Grant Thornton’s
Asset Management Practice