SEI Poll: Biggest Challenges for Hedge Fund CFOs Is Meeting Regulatory Requirements and Investor Expectations

OAKS, Pa., Jan. 10, 2011 /PRNewswire/ -- While the economy remains a concern, hedge fund CFOs say addressing new regulatory requirements and meeting evolving investor expectations are the biggest challenges for 2011, according to a poll released today by SEI (Nasdaq: SEIC). The poll, conducted recently at the company's annual Hedge Fund CFO Forum, revealed that half of the CFOs attending the forum felt that addressing new regulatory requirements is the most significant challenge facing their industry over the next 12-18 months, while more than a third (39 percent) see economic uncertainty as their biggest challenge. The poll also revealed an ongoing shift in investor expectations, as 40 percent of CFOs said providing satisfactory risk data is the biggest challenge, outside of performance, in satisfying investors.

The poll points to the increasing importance of operational systems and processes in addressing regulatory changes and investor expectations. In fact, nearly a third of those polled said getting investors comfortable with the firm's operating infrastructure is their biggest challenge in satisfying investors. When asked about the biggest operational challenge, nearly half (44 percent) of respondents said increasing efficiency and scalability.

"Satisfying increasing investor expectations related to transparency and due diligence requirements continues to be the drumbeat for managers," said Phil Masterson, Managing Director for SEI's Investment Manager Services division. "While we asked our clients about their challenges, we do see opportunities for managers to differentiate themselves. There are opportunities to better educate investors. Opportunities to bolster operational infrastructures.  Opportunities to enable greater transparency, drive more efficiency, and enhance internal controls.  Ultimately, if done correctly, there are opportunities for managers to create stronger client relationships and build their businesses."

No matter what the ultimate outcome, the poll points to a very real concern among CFOs related to the effect new regulations could have on their businesses. Nearly half (47 percent) of those polled said they anticipate the new regulations will have a significant impact in their firm's profitability, which only furthers the necessity for managers to gain efficiencies and create scalable processes.

SEI provides a diverse set of operational resources to investment managers including expert insights on complex issues and timely topics. The company recently hosted its annual Hedge Fund CFO Forum as part of its Knowledge Partnership Program. The event brings together CFOs as well as legal and accounting experts to discuss key trends and topics and to share emerging best practices.

About SEI's Investment Manager Services Division

SEI's Investment Manager Services division provides comprehensive operational outsourcing solutions to global investment managers focused on mutual funds, hedge and private equity funds, exchange traded funds, collective trusts, and separately managed, as well as institutional and private client, accounts. The division applies operating services, technologies, and business and regulatory knowledge to each client's business objectives.  Its resources enable clients to meet the demands of the marketplace and sharpen business strategies by focusing on their core competencies. The division has been recognized by HFMWeek as "Most Innovative Fund Administrator (Over $30bn AUA)" and "Best Funds of Hedge Funds Administrator (Over $30bn AUA)." For more information, visit http://www.seic.com/enUS/im/303.htm.

About SEI

SEI (Nasdaq: SEIC) is a leading global provider of outsourced asset management, investment processing and investment operations solutions. The company's innovative solutions help corporations, financial institutions, financial advisors, and affluent families create and manage wealth. As of September 30, 2010, through its subsidiaries and partnerships in which the company has a significant interest, SEI administers $402 billion in mutual fund and pooled assets and manages $164 billion in assets. SEI serves clients, conducts or is registered to conduct business and/or operations, from numerous offices worldwide. For more information, visit www.seic.com.

SOURCE SEI