The global head of hedge funds for KPMG, Robert Mirsky, has stated the three trends he thinks are likely to be major factors to influence the hedge fund market in 2014.
The hedge fund market is already looking promising for 2014, with Preqin’s latest report on the sector showing that 2013 made gains on the previous year. According to the information, 84 percent of investors felt that hedge funds were meeting their personal targets.
The three main areas that Mirksy has highlighted as being of particular interest include the rising acceptance of the need for cost-efficiency when dealing with funds; the influence of the AIFMD (Alternative Investment Fund Managers Directive) which has recently been implemented; and the increase of liquid alternatives as a viable source.
The first factor refers to the need for hedge funds to offer ever more reasonable prices for services that are gradually becoming pricier. As a result, firms are becoming more cost-efficient to minimise the loss of wealth through operation costs.
The second involves the introduction of greater oversight to hedge fund proceedings, with regulations regarding investor protection, capital, investment safekeeping and marketing used in the financial sector.
The third factor is related to alternative funds as a whole. Liquid alternatives are known as alternative mutual funds, and this type of financial product can lead to a large asset base from which to invest. It is recommended as being suitable for the regulated market in particular.
Bearing these in mind, the hedge fund market should be able to thrive in 2014, and take investors’ faith to an even more secure level post-financial crisis.
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