By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-The International Organisation of Securities Commissions (IOSCO) said on Friday hedge fund assets under management were $2.6 trillion, up 34 percent as of September 30, 2014 from the last Survey conducted in September 2012.
According to global securities regulator, the IOSCO Hedge Fund Survey remains the only global view on hedge funds from a regulatory perspective and is therefore of key interest to the wider global debate on related issues.
IOSOC reported the Survey captured data from 1,486 qualifying funds, an increase of 42 percent from the 1,044 funds that participated in the September 2012 survey.
The world’s securities regulator says the aim of the survey is to gather data from hedge fund managers and advisers about the markets in which they operate their trading activities, leverage, funding and counterparty information. “It forms part of IOSCO’s efforts to support the G20 initiative to mitigate risk associated with hedge funds,” IOSCO said.
The report explains the results of the third IOSCO survey and provides an overview of the hedge fund industry as of September 30, 2014.
Other highlights of the survey according to IOSCO include that most of the growth recorded in the industry can be attributed to changes in asset values, net inflows and fund structures. “Some of this growth also reflects more widespread and accurate reporting across participating jurisdictions,” the IOSCO survey affirmed.
Another highlight is that the hedge fund industry is largely concentrated in the United State of America, whilst the Cayman Islands continue to be the tax domicile of choice. “Hedge funds remain mostly US dollar based and predominantly invested in North American assets,” the Survey noted.
It also highlighted that the use of equity-based strategies remains the most popular amongst hedge funds and its financial leverage is used by hedge funds across all jurisdictions, except in Japan; comparisons of synthetic and gross leverage which continue to be hampered by the different leverage metrics used by jurisdictions.
It further affirmed that reported data suggests there is no significant liquidity mismatch in hedge funds; however, this is against the backdrop of “normal” market conditions; and edge funds seem aware of the market liquidity of their portfolio positions, and they can generally make use of suspensions and gating to manage investor redemptions.
