Международный журнал бухгалтерских исследований

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Impact of Regulations on Hedge Funds and the Potential Impact on Alpha in 2012

Payal Chadha

Growth in the hedge fund industry has been a topic of much discussion in the press with regards to regulators regulating the hedge fund industry. The purpose of this study was to investigate whether creating regulations, has impacted the hedge fund industry and alpha components. The focus has mainly been aimed at the hedge fund industry existing in USA and Europe. Minor contrasts have been made in comparison with Canada and Latin America. The author has defined hedge funds, its salient features, its functioning, different strategies used, reason for introducing regulations, challenges faced and the developments that are occurring and have occurred in the industry for smooth operation. The author also defines alpha and its nature in the hedge fund industry in order to understand if any impact has been made due to these regulatory approaches. The author discusses the current and upcoming hedge fund regulations in 2012. The exploratory method was used to conduct the study further. This method involves usage of both qualitative and quantitative data. Finally, the author uses both primary and secondary data to derive conclusions based on the understanding and knowledge gained through the literary sources.