Three Goals For Hedge Fund Communications

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Three Goals For Hedge Fund Communications
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Hedge fund managers don’t like to tip their hands. Letters to investors are often put off for as long as possible so that they reveal what positions were instead of what they are right now, and even then they will often just outline long equity positions instead of explaining all of the fund’s investments. Tactically this makes sense, but hedge fund managers need to anticipate changing regulatory standards and client expectations with better communication.

Standardizing hedge fund communications

“Hedge fund managers currently provide investors with performance data, investor letters and risk reports. However, the frequency of and detail in the reports are left to the discretion of each fund manager,” writes Intralinks in a recent whitepaper. “Proposed hedge fund regulations, along with the MFA and AIMA guidelines, attempt to bring consistency to how a fund should communicate with its investors.”

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Intralinks sets three business goals that it thinks hedge funds should follow to both remain competitive and to stay in regulators’ good graces: improving transparency; sharing information equally and simultaneously with qualified prospects; and managing material information for quick retrieval and clear accountability.

The default secrecy that many hedge funds fall back on could become a liability as investors insist on knowing how the fund i