The Board of the International Organization of Securities Commissions (IOSCO) has published its report on the Fourth IOSCO Hedge Fund Survey, which provides regulators new insights into the global hedge fund industry and the potential systemic risks this industry may pose to the international financial system.
IOSCO's biannual survey has become an important resource for regulators, given the lack of public and global data on hedge fund activities. The survey facilitates the regular collection and analysis of hedge fund data, enabling regulators to share information and observe trends regarding trading activities, leverage, liquidity management, markets and funding in the global hedge fund sector.
The report explains the results of the fourth IOSCO survey and provides an overview of the hedge fund industry based on data as of 30th September 2016. Since the first survey was conducted in 2010, data collection has expanded due to enhanced regulatory reporting regimes in some jurisdictions and fewer legal constraints around the use and sharing of data.
The latest survey notes that in the two years since the previous results, global assets under management (AUM) of hedge funds captured by the survey rose 24 percent to $3.2 trillion. While this increase may reflect a combination of more widespread reporting across jurisdictions, market performance, and net fund subscriptions, it is not conclusive from the data.
It also said that the Cayman Islands continues to be the fund domicile of choice, making up 53 percent of the global total by net asset value (NAV). This is largely unchanged from previous years.
According to the data from the survey, equity long/short was the most widely used investment strategy, followed by global macro and fixed income arbitrage.
IOSCO, Board of the International Organization of Securities Commissions, Hedge funds survey, Cayman Islands