Reuters News
BOSTON, Jan 8 (Reuters) - Hedge fund industry trade group Managed Funds Association (MFA) said on Friday it plans to collect key financial data from managers at a time the secretive industry is under pressure to become more transparent.
MFA, which counts powerhouse firms Citadel Investment Group, Paulson & Co and S.A.C. Capital Advisors as members, said it will ask managers to say how much money they invest, the number of funds they manage and how many people they employ.
The data, to be reported by managers through PerTrac Financial Solutions' P-Card system and collected for MFA by an independent accounting firm, will be used to help educate policymakers and journalists about the $2 trillion industry, MFA said.
"As the primary source of industry information for policy makers, the media and the public, it's important that we collect and aggregate data in a confidential and timely manner from as many managers as possible," MFA President and Chief Executive Richard Baker said in a statement.
MFA said that no information about specific funds, including their names, will be released, ensuring discretion for privately held funds whose managers are often reluctant to give any details about themselves and their strategies for fear of being copied by rivals.
The association's move comes at a time that pension funds and endowments are eager to use loosely regulated hedge funds more widely to help boost investment returns. But their chief investment officers are demanding more information about exactly how these funds actually make money to avoid a repeat of the heavy losses many of these investors suffered with hedge funds in 2008. That year funds, on average, lost 19 percent and last year they gained 20 percent, data from industry research firm Hedge Fund Research showed.
Currently hedge funds are not required to report their assets or anything else about themselves to financial regulators. But that may soon change amid proposals to put the industry on a tighter leash, with some people arguing that U.S. state regulators should win new powers to keep a closer eye on the funds.
This is not the first time regulators have tried to gain better insight into how hedge funds operate. Four years ago a court blocked the Securities and Exchange Commission's rule that hedge funds must register with the agency as these funds were becoming more popular.