REGULATION

INCREASES

COMPETITION AMONG HEDGE FUNDS

BY TROY DIXON

4 WAYS

2008 brought about a number of changes for the finance industry, among them the UA-Dodd Frank Act, which permanently altered the hedge

fund landscape.

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Forced to abide by the rules and

restrictions of the European AIFMD, larger hedge funds have had to give

up some of their more effective

tactics, like using leverage as a tool to

eclipse their competition.

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These new rules, however, have

leveled the playing field and given

rise to new players in the game. Now, competition is stronger and the result is a new, more fair hedge fund space.

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In the following slides, I will further explore the impact competition has

had on today's hedge funds in

comparison to pre-2008 methods.

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PRIME BROKERAGES

OPTING FOR SMALLER

HEDGE FUNDS

While not always the case, smaller hedge funds have distinct advantages over their larger competitors. A smaller hedge fundhas the ability to operate within a single regulatory framework, dealing unilaterally with both risk and reporting environments.

01

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INCREASED FOCUS ON

TECHNOLOGY

Technology allows the operations side to manage resources more effectively and tackle the complicated problems that arise with managing multiple accounts, allowing a large hedge to be effective across their entire client base. 

02

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BRANCHING PAYMENT

STRUCTURES

Originally, there were only two options when it came to hedge funds.  Now, smaller hedge funds can operate on a case-by-case basis, giving them a more docile framework of payment structures.  

03

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FURTHER

CUSTOMIZATON

As smaller hedge funds become a more viable choice, they’ve taken great lengths to diversify their strategies. They can custom tailor it to their clients in a way the larger, more established funds might not be nimble enough to operate.

04

While these overall figures might not paint an accurate picture of what each individual hedge fund is

capable of, they do show that seismic

shifts are happening in this very

dynamic market.

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