Hedge Fund Transparency Increased In 2005

by Phillip Morton, Investors Offshore.com

09 January 2006

Hedge funds are becoming more transparent to investors as hedge fund databases strive to improve their data collection according to Strategic Financial Solutions, LLC, creator of leading asset allocation and investment analysis software, the PerTrac Desktop Analytical Platform.

The 2005 Hedge Fund Database Study showed that, after combining all 12 databases and integrating the funds identified in the 2004 study, there were nearly 41,000 records across all databases, a jump of more than 16,000 hedge fund entries from last year.

While this increase has coincided with rapid growth in the number of hedge funds since 2004, the report concluded that the numbers indicate "great effort and improvement in fund data collection on the part of hedge fund databases."

"Indeed, it is safe to say that the quantity of hedge fund data available to investors increased dramatically in 2005," the report suggested.

Nonetheless, the report stressed the importance of subscribing to more than one database to get a more complete picture of hedge fund coverage.

In other findings, the study showed that that were approximately 12,250 hedge funds and funds of hedge funds in the various hedge fund databases once duplicate funds were removed. Nearly 10,500 of these funds reported performance data in 2005, revealing that nearly 2,000 funds ceased reporting to hedge fund databases since the 2004 study.

More than 8,100 single manager hedge funds were identified, as well as approximately 4,150 funds of hedge funds. Of the single manager hedge funds, more than 6,900 have reported performance in 2005. In addition, there were roughly 3,550 onshore funds and 4,550 offshore funds. Approximately 2,900 onshore funds and 4,000 offshore funds have reported performance in 2005.

Single manager funds in the databases account for nearly $1.35 trillion under management, and more than 250 funds have surpassed the $1 billion mark. However, the vast majority of funds continue to manage less than $25 million.

The study examined the hedge fund listings from twelve of the major hedge fund databases, including Alternative Asset Center, Altvest from InvestorForce, Barclay’s Global HedgeSource, CISDM, Cogenthedge, Eurekahedge Asian Hedge Fund Database, Eurekahedge European Hedge Fund Database, Eurekahedge Fund of Hedge Funds Database, HedgeFund.net from Channel Capital Group, Hedge Fund Research, Lipper/TASS and the MSCI Hedge Fund Indices(SM).

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