Hedge funds are now a $1,000bn industry and still growing at 20% per annum. But it’s not all plain sailing. Retail investors are becoming increasingly more demanding. Institutional investors, particularly pension funds are also joining in the fray. With expectations increasing, the pressure is on to develop new products and enhance returns further.

As the industry matures and competition increases, there is unprecedented scrutiny from the regulators and tax authorities, who expect far greater transparency than has traditionally been offered.

Hedge fund managers face a number of issues:

• Tax and regulatory concerns – fund establishment and structure, FSA authorisation, manager compensation, documentation best practice
• Investment manager exemption – minimising the risk of unforeseen UK tax liabilities
• Institutional investment – creating tax-efficient bespoke investment structures to attract different categories of investor
• EU Savings Directive – transitioning businesses processes to comply with onerous new reporting regulations
• Executive compensation planning – ensuring tax-efficient structuring of employment and compensation to maximise employee retention
• LLP conversion – the conversion process and related tax issues
• Transfer pricing and Inland Revenue enquiries – management of detailed investigations
• USA Patriot Act – Board compliance with detailed anti money laundering requirements which now apply to funds with a US investor, investment adviser or sponsor registered outside the US

Deloitte has experience in dealing with all of these issues, allowing funds to concentrate on their essential core task - managing the assets. We also provide statutory audit services to managers and funds; risk management and regulatory advice; control reviews and corporate restructuring advice.

Deloitte Touche Tohmatsu member firms have established alternative investment team in all the key locations: Bermuda, the Channel Islands, the Cayman Islands, Dublin, Guernsey, Jersey, Isle of Man, London and New York with the appropriate sector, tax and regulatory skills.