FSA to probe hedge fund valuations

New Angles

The UK's Financial Services Authority is set to investigate hedge fund managers that it says could be overstating their assets to gain larger bonuses.

In a feedback document to a hedge fund discussion paper published in June last year, the FSA identified two areas of concern. First, it warned that hedge fund managers could be tempted to overstate their valuations of assets under management to inflate their pay, and, given the difficulty in valuing illiquid assets, it may not be easy for