Hedge funds have shown great signs of improvement in their risk management practices during recent years because of an increasing interest in them among traditional investors, says a new Mercer Oliver Wyman study.
The study shows that roughly 85% of those funds who responded to the survey have added a chief risk officer to their management lineup.
Funds are also fending off the risk of failure by devoting portions of their capital to internal audits and demanding more time for money to incubate in the funds before being pulled by investors.
But the study also found that there is still a ways to go in the areas of transparency and the disclosure of risk-taking activity.