Institutionalisation and succession planning are two challenges for larger hedge fund managers

Regulation that has helped curtail investment bank proprietary trading will bring fresh talent to the hedge fund industry, bringing with it innovation and growth, says Ernst & Young.

The industry is going through another period of innovation and change, according to Julian Young, a partner at Ernst & Young financial services. It is not only volatile and unpredictable markets that are testing the mettle of hedge fund managers and forcing change, but also regulations that dictate a new way of operations.

But Young sees these as both positive for the industry. More demanding institutional investors have pushed managers to put into place the infrastructure and the governance