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Alternative investment industry favours external regulation, says PricewaterhouseCoopers

Nearly three-quarters of senior alternative investment professionals taking part in a survey by PricewaterhouseCoopers believe that the industry should be regulated more formally, while on

Nearly three-quarters of senior alternative investment professionals taking part in a survey by PricewaterhouseCoopers believe that the industry should be regulated more formally, while only 27 per cent believe it should remain the same.

More than half of those in favour of more formal regulation (42 per cent) believe that the industry should be completely externally regulated, while 31 per cent would prefer to see the industry police itself.

‘This points to a significant shift in sentiment from what we have heard historically in the market,’ says PricewaterhouseCoopers alternative investments leader Pars Purewal. ‘For the first time a greater proportion of the industry would prefer to be regulated externally than self-governed."

The poll of nearly 100 industry professionals was conducted by PricewaterhouseCoopers at an alternative investment seminar. It also found that almost half of all attendees (47 per cent) would like the valuation process to be assessed independently and that the end-valuation should be validated by a third party.

Asked whether investors are currently seeking greater provision of information, 73 per cent of survey participants said demand for information was increasing, while 93 per cent reported that transparency, risk management and governance were important to investors.

‘It is not surprising that, in these turbulent times, investors are demanding more from the product providers,’ Purewal says. ‘Investors want to know more about risk and valuation, and generally they want more transparency.

‘This is very consistent with the Global Alternatives Survey we released earlier this year in association with the Economist Intelligence Unit. We expect investors to want more information in future, and this poll reinforces this point.’

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