As alternative investments become more mainstream, information about investment vehicles, underlying assets and other risk management data is also more important to investors, but best practices are lagging behind the demand, according to a survey by Northern Trust. The survey reveals transparency leads all investment considerations and grew in importance since the 2008 financial crisis. Respondents indicate the higher level of scrutiny applies to both traditional and alternative investments, such as hedge funds, private equity, infrastructure, real estate and natural resources:
- 63% say degree of transparency is important for alternatives and 62% say the same for traditional investments; and
- Transparency became more significant after the financial crisis, cited as the most important post-investment consideration by 21% for traditional assets and 17% for alternatives, compared to 9% and 3%, respectively, pre-crisis.
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