Research by the SEI and Greenwich Associates showed that three-quarters of institutional investors saw infrastructure surrounding risk management as âvery importantâ.
Clarity of investment strategy was also deemed to be of the same significance by 79 per cent of respondents - which the report authors said shows an increased demand for transparency among investors.
Up to 79 per cent cited a lack of transparency as their main worry, a figure which was up from 56 per cent seen in 2009.
Phil Masterson, managing director for SEIâs Investment Manager Services division, said: âManagers must differentiate themselves through increased transparency, enhanced risk management, and reporting as well as better overall client service to gain and retain assets post-financial crisis and post-Madoff.
âWeâve been making investments in new technologies and enhancing our services to help our clients do just that over the past 18 months and weâll continue to help them stay ahead of the curve.â
Further findings from the study showed that liquidity risk was named as the main worry for more than half of hedge fund investors.
By Jim Ottewill