A leading membership organisation has changed the way that it presents hedge fund gearing data.
A leading membership organisation has changed the way that it presents hedge fund gearing data.
The Association of Investment Companies (AIC) has announced that information on member companies will now be displayed in two figures.
A gross gearing figure will still be given, but this will be accompanied by a net gearing figure which takes into account both cash and cash equivalents in a company’s portfolio.
Ian Sayers, director general of the AIC, claimed that this change will help investors to understand the effects of gearing in much more detail.
He said: “Gearing is a unique feature of investment companies which over the long term can enhance performance. It is important to recognise the impact of gearing as it works by magnifying the company’s performance.”
Earlier this month, the CFA Institute and the UK Investment Performance Committee announced that they would be launching a new scheme designed to standardise hedge fund performance reporting.
