According to new research 'Navigating New Complexities' published today by Ernst & Young. The world's leading hedge funds managers are more concerned about attracting and retaining talented people and managing growth than anything else.
"Governance and infrastructure are the top enablers for hedge fund growth, as the industry continues to mature and develop," said Leon Chin, partner in the Ernst & Young Toronto hedge funds practice.
The poll of over 100 top global hedge funds (and fund of funds) managers, collectively managing some $900 billion in assets, shows that retaining the right people (42%) and managing growth (39%) are the highest level challenges over the next year, compared to just 9% who anticipate investing or developing in new products. Respondents were principals, chief operating officers and chief financial officers at these funds.
Art Tully, co-leader of the global hedge funds practice at Ernst & Young, said: "The global hedge fund industry now manages $2.5 trillion of assets; $41.1 billion poured in from investors in the second quarter of 2007 alone.
The industry appears to be proving that it can handle such inflows. The ability to absorb such flows is only tested by the capacity to grow and retain talent.
Hedge funds are working just as hard as other financial institutions to ensure they attract and retain the right people. Salary packages (86%) and firm culture (83%) are the main attractions enticing the best staff to join.
The managers surveyed for this research represented some US$900 billion in funds (approximately 55% of the entire industry).
Ernst & Young has teams around the world, including North America, the UK, Cayman, Bermuda, Ireland, continental Europe, Hong Kong and Australia, who are part of our global alternative asset management practice.