Regulation could be an opportunity for the fund of hedge funds industry to attract investors again

Funds of hedge funds have a role to play in institutional investor portfolios but they need to adapt their value proposition. Regulation could help the FoHF industry make its voice audible.


The implementation of the granularity adjustment, first introduced in the Basel framework, makes it possible to take the diversification potential of funds of hedge funds (FoHFs) into account and in turn to reconcile the outcome of the standard formula in Solvency II with empirical evidence.

With the severity of the recent financial crises, systemic risk issues have resurfaced for the first time in many years. It is no surprise to see a wave of new regulations and regulatory proposals on the

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