2017 hedge fund trends and how to keep up
The hedge funds business is a tough one – kind only to those who are keen on adapting to changes that happen by the day. This coming 2017 will not be any different from the past years: It will demand the full attention of those who want to survive. Below is a list of some of the hedge fund trends to watch out for.
Continued popularity of energy funds. Investments in the energy sector tend to have consistent gains, making it a popular option for many client-investors. That said, it is important to keep abreast of developments in this field, one marked by ups and downs across global markets, as well as the strong impact of geopolitical upheavals in relevant territories, such as the Middle East. Other political developments worth monitoring would be the impact of Brexit, the rise of populist regimes in many countries, and also the emergence of Asia as a rising economic power.
Increased regulation. The next year will still see more complex regulations and tightened enforcement of the pertinent policies, pushing asset management firms to establish better reporting and corporate governance standards. Assets have to perform, and profits should be duly distributed to client-investors. Always, transparency and accountability should be the prime values to uphold in the hedge fund management operations. This requires the setup of compliant data management mechanisms, and a renewed focus on improving data security.
More opportunities in pensions. Amid market volatility, investors and fund managers are on the lookout for ways to diversify, and are reallocating to better-performing domains. For many of them, pensions seems to be the answer. Forecasts are good for pension plans, and this trend is related to demographic characteristics of populations not just in the United States but also in Europe, Canada, and the United Kingdom. Indeed, retirement plans continues to be among the most reliable investment vehicles, with it typically seen as the only source of income for some.
Among players in this competitive business, these hedge fund trends have become much easier to adapt to through the employment of outsourcing solutions. Asset servicing firms possess the technology, the talent pool, and the overall expertise especially in the middle- and back-office aspects of hedge fund management. Through their help, firms are able to handle the demands of daily accounting, tax reporting, trade reconciliation, data management, among other functions that take up so much of company tech resources and manpower.