Hedge Funds Throwing Off Veil Of Secrecy

by Phillip Morton, Investors Offshore.com

18 November 2004

Hedge fund companies are beginning to shed their reputation as secretive organisations reluctant to divulge their trading methods and are becoming ever more willing to share information with databases, Reuters has reported.

According to industry consultants Hedge Fund Research Inc., evidence of this has been witnessed by the number of funds disclosing information for investors to view in its database, which has quadrupled from 1,000 funds in 1998 to 4,000 today.

"As the hedge fund industry grows, we are seeing more transparency and noticing that even the largest hedge funds are less reluctant to share certain information," observed Joshua Rosenberg, president of HFR.

Rosenberg suggests that increasing competition is a factor behind the opening up of the industry as the stellar growth rate of the industry forces more and more hedge funds to chase fewer new investors.

"This is a simple way of attracting investment dollars," he noted.

The move to make US hedge funds register with the Securities and Exchange Commission, and the demand for knowledge of new hedge funds by funds of funds are also thought to be contributing factors to this trend.

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