Demanding disclosure

The dislocation in the correlation markets in May confirmed supervisors' fears about concentration risk in the hedge fund sector. And this is fuelling pressure for hedge funds to make more data disclosure. But how would this help to reduce risk? By Christopher Jeffery

The rapid growth of hedge funds in the past five years and their relatively poor performance during the past 12 months has increased concerns that troubled hedge funds could have a major detrimental effect on financial markets. Calls for increased transparency and regulation of the industry have grown, particularly as more conservative investors such as pension funds and insurance companies have ramped up their exposures to this alternative asset class. Hedge fund assets under management are now