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Hedge funds explore non-traditional financing 

December 3, 2015

Investor Daily

The 2015 Global Hedge Fund and Investor Survey released by EY revealed that hedge fund managers are increasingly exploring alternative and non-traditional sources of financing.

According to the report, 29 per cent of hedge funds surveyed experienced prime broker price increases in the past year, with 22 per cent expecting further increases.

As a result, 13 per cent of hedge funds intend to seek financing from non-traditional sources in the next two years. The alternative sources being considered are institutional investors, sovereign wealth funds, custodians and other hedge funds, the report said. 

EY Oceania wealth and asset management leader Antoinette Elias said: “All forms of financing are becoming more expensive for the majority of managers, and this has a direct effect on overall trade economics.”

The report said new regulations, like Basel III and Dodd-Frank, have changed the business dynamic between hedge fund managers and prime brokers, with many of the latter now reluctant to hold cash for the funds. Read more

 
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