EUROPE - Lobbying by pension funds for independent valuation of hedge funds has fuelled a hiring spree for back office staff, research suggests.
PricewaterhouseCoopers' study Infrastructure: From Cost to Benefit, said valuing fund assets, particularly illiquid holdings, was "a critical area where investors and regulators desire objectivity".
As a result, due diligence by investors such as pension funds was becoming "more rigorous, more intrusive and more time-consuming, seeking to understand the precise roles in valuing assets, as well as details of service level agreements".
Europe's forthcoming Alternative Investment Fund Managers Directive stipulates independent valuation, while allowing in-house valuation if valuation teams are independent of portfolio managers.
Meanwhile, America's SEC expects independent judgement be exercised in valuing and pricing portfolio assets, PwC said.
"Having a strong and robust infrastructure is becoming a prerequisite for raising assets," the firm added.
Intensive searches for back office staff already doubled base pay for such experts in Europe over recent years, the report noted.
About 65% of respondents said they were seeking back office staff, while half noted they were not keenly seeking fund managers.
Compliance and risk management have been two areas where recruitment in the UK was heaviest, with over 90% of respondents saying they are ‘active' or ‘very active'.
"Competition for high-quality tax, risk and compliance staff is rising, demonstrating the importance of having experienced people with good credentials," PwC's report said.
"At a time when hedge fund investors, legislators and regulators are seeking improved governance, controls and transparency, strong infrastructure is critical."
PTL has appointed Karein Davie as a client director in its Birmingham office.
The level of interest rate hedging increased to £29.5bn of liabilities in the second quarter as pension funds continued to de-risk, according to BMO Global Asset Management's research.
UK inflation has risen for the first time since November to 2.5% in July, up from 2.4% in June, thanks to rising fuel costs and the price of computer games.
The number of DB pension scheme trustees targeting a buyout with an insurer has increased significantly in the past five years, latest research from Willis Towers Watson shows.