Alternative investors favour external regulator, says PwC survey

The alternative investment industry is in favour of being externally regulated, according to poll conducted by PricewaterhouseCoopers

A poll of almost 100 leading alternative investment industry professionals, conducted by PricewaterhouseCoopers at one of its alternative investment seminars, found that nearly three-quarters –73% – of senior executives feel the alternative investment industry should be regulated more formally. More than half of these (42%) think the industry should be fully externally regulated, and 31% would prefer to see the industry self-governed. Only 27% believe it should remain the same.

Pars Purewal, alternative investment leader at PwC, says: “This points to a significant shift in sentiment from what we have heard historically in the market. For the first time a greater proportion of the industry would prefer to be externally regulated than self-governed.”

The poll also revealed that almost half of those surveyed (47%) would like the valuation process to be assessed independently and that the end valuation should be validated by a third party.

When asked whether investors are making greater demands in relation to the provision of information, 73% of voters noted it is increasing and 93% considered transparency, risk management and governance important to investors.

Purewal adds: “It is not surprising that, in these turbulent times, investors are demanding more from product providers. Investors want to know more about risk, valuation and generally they want more transparency. This is very consistent with the Global Alternatives Survey we released earlier this year. We expect investors to want more information in future and this poll reinforces this point.”