The survey also found that the majority of investors and funds of funds believed position-level disclosure would only affect the performance of certain types of hedge fund strategies. But 32% of hedge funds believe such transparency would have a significant or material impact on hedge fund performance.
Mark Anson, chief information officer at Californian pension fund Calpers and member of the IRC’s steering committee, said a balance was needed regarding hedge fund disclosure. “Transparency is an issue for all investors,” Anson said. “However, there must be a balance between the disclosure of meaningful information to investors and the protection of a hedge fund manager’s proprietary investment knowledge.”
For example, investors place more emphasis on risk profile and stress-test results than on position-level transparency. But funds of funds placed an equal emphasis on these two areas of disclosure. The survey found that 80% of funds of funds and 13% of investors received position-level information. That said, a third of funds of funds and hedge funds said investors request more information than they are willing to provide.
Survey participants included institutional investors with $479 billion of assets under management, funds of funds with $36 billion under management and hedge funds with $109 billion under management.