Best practices floated for hedge funds

In response to concerns of the stability of hedge funds, a London-based group has issued voluntary standards for hedge fund managers. The Hedge Fund Working Group consists of 14 hedge fund managers. The recommendations are designed to handle conflicts of interest between managers and investors, according to the report. They include managers’ adopting an independent process for valuing portfolios and to improve the oversight of funds. The report also suggests enhanced disclosure to investors and that managers should have a comprehensive framework to manage risk. “Our final report is the result of extensive consultation within the financial industry, which has helped us to refine the standards and in some important respects make them more rigorous,” said Sir Andrew Large, chairman of the HFWG. “It is the investors who can provide the market discipline to ensure these standards are widely adopted.”