As time goes by in Europe, hedge funds are increasingly embarking on two diverging paths to success: either catering to the high-net worth investors, or hooking up with traditional asset managers that will direct institutional money to them. The major finding of PricewaterhouseCoopers’ fourth annual report on regulation, taxation and distribution of hedge funds in Europe was that hedge funds are split over preferring “distribution channels, infrastructure support, significant seed capital capabilities and where there is an acquisition, access to tradeable [normally-listed] stock” that asset managers offer. The marriage between hedge funds and traditional asset managers, says PwC, could benefit institutional investors, through business models that include acquisition and joint-venture arrangements. The one thing that will keep all hedge funds on the same page, according to PwC, is corporate governance, as hedge funds in the U.K. (as well as mostly everywhere else) are the focus of attention not only by regulators, such as the U.S. Securities and Exchange Commission, but also organizations such as the International Organisation of Securities Commissions, which is developing a code of practice for hedge funds.
