HFSB Launches a New Consultation on Managing Conflicts of Interest

One of the important changes being proposed will require managers to disclose parallel funds, including employee funds, and to disclose the aggregate size of employee and partner co-investment in those funds. The proposed changes will be subject to consultation with the industry and regulators.

Dame Amelia Fawcett, Chair of the HFSB, stated:

“The Hedge Fund Standards already address many different types of conflicts of interest in areas such as valuation, risk management and handling of redemptions. These new Standards and guidance are intended to enable better due diligence of conflicts of interest by investors.”

David George, Head of Debt & Alternatives of Future Fund Australia, said: “This consultation demonstrates the HFSB’s ongoing efforts to address important investor concerns, particularly in the area of conflicts of interest. The proposed changes will help investors assess the alignment of their managers with the investors’ interests.”

The proposed changes to the Standards are outlined in the Consultation Paper published today. The consultation will run until 12 June 2015.

In line with the HFSB’s mandate to update the Standards from time to time, this is the fourth time the HFSB is consulting on amending its Standards since their first publication in 2008.