One likely result of the current credit crisis, say observers, will be increased regulatory attention on financial firms such as investment banks and hedge funds. "More hedge fund oversight and pressure for transparency is definitely coming," said Michael Seidman, senior consultant at Boston-based Citisoft, an investment management advisory firm.
Faced with that prospect, the hedge fund industry has been taking the initiative, beefing up best practices in sensitive areas like transparency, risk management and operations. And a growing movement toward third-party valuation of over-the-counter products like credit default swaps and collateralized debt obligations is generating big business for the sector's handful of providers.
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