Nearly 99% of senior hedge fund partners expect increased regulation, according to a new Rothstein Kass survey, a huge increase from 8% in 2008 and 9% in the firms initial report on alternative investor trends in 2007.
Of the 239 senior hedge fund partners surveyed, 83.7% also expect competition for investors to dramatically increase, 82.4% believe hedge funds will become much more costly to operate, 79% think hedge funds will revert to being a niche investment class and 64% predict that marketing will become much more important.
While managers recognize that enhanced transparency has the potential to increase operating costs, many are broadly supportive of increased regulation, Howard Altman, co-managing principal overseeing the financial services group at Rothstein Kass, said in a news release about the survey. They recognize that legislation may help to restore investor confidence, leading to renewed asset flows over time.
The survey also found that 61.1% of respondents saw their personal net worth decrease 30% or more in 2008, while 26.8% had their personal wealth decline by less than 30%.
The survey of partners at hedge funds with at least $100 million under management that have operated for more than five years was conducted by telephone in January.