Investors return to hedge funds as $2 trillion mark approaches

How to set up a hedge fund supplement, December 2010

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Regulation in particular is going to have a profound impact on the industry. Already practices are changing and the added costs of compliance could start squeezing start-up funds. At the same time the spin-out of proprietary trading desks from banks and other restrictions on their investment into hedge fund vehicles could mean a lot of talented managers entering the industry.

While European legislation will have a profound impact, few expect the traditional model of Cayman/BVI-domiciled funds to