ASIC Studied Hedge Funds
Quick Link: Australian Hedge Funds
Australia's financial services regulator, ASIC, is researching hedge funds in Australia to better understand the potential risks to investors. The study, based on publically available information, will not be published and will be used for internal purposes only.
In Australia, hedge funds may be offered to retail investors under a registered Product Disclosure Statement. Around half the A$20 billion Australian hedge fund industry is made up of registered funds.
A key observation of the study is that the funds offered are more benign then ASIC had expected in a number of respects; gearing, fees and profitability.
Also, there does not appear to be any disruptive influence by foreign-operated hedge funds on the efficient and proper functioning of Australian markets.
As with all funds offered to Australian investors, ASIC is concerned that product documentation needs to be "clear, concise and effective". Hedge funds are not likely to be singled out in particular compared with other retail/mutual funds.
By Rick Steele