Hedge funds must disclose their holdings to investors on a much shorter time scale, says Gina Sanchez, Managing Director, Public Markets and Research, The California Endowment.
Speaking to GlobalCustodian.com at a hedge funds conference in Dubai, Sanchez stated that at 90 days hedge fund holdings should be made public, as there are no value in holdings this old, and holdings to investors must be given sooner. The purpose of transparency is that so that you can stick to your process and that you can aggregate your portfolio. A simple set of holdings goes a long way, Sanchez explained.
Discussing hedge fund secrecy, Sanchez drew parallels to the behaviour of Silicon Valley executives and their unnecessary stealth mode attitude during the late 1990s. Hedge fund managers were following the same strategies. They were all doing the same thing, hence the need for their excessive secrecy. This was much the same as executives in Silicon Valley discussing the need for stealth mode due to the fact that many of their businesses held little value, explains Sanchez. At present, algorithms are written to work out what managers are holding, this is a waste of brain-power.