Greenwich Associates and SEI have published a white paper that reviews the growing importance of transparency, fee flexibility and liquidity in the Hedge Fund Marketplace.

"The survey revealed a continued commitment to hedge fund investing among institutions as nearly 80 percent of all survey respondents said they have no plans to change their hedge fund allocations in the next 12 months, while 15 percent expect to increase their allocations. What will change is their demand for transparency. Over 70 percent of respondents reported requesting more detailed information from managers than they did a year ago. While the type of information sought ranged from counterparty and leverage exposure data to sector and position-level detail, over 80 percent of the respondents reported a focus on funds� valuation methodologies. Investors also continue to exert influence on fee structures, as nearly one in five respondents reported negotiating fee arrangements different than the standard �2 and 20� for single-manager funds and �1 and 10� for funds of hedge funds over the last year."

More info here, http://bit.ly/9k9KTR

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The study follows here, http://bit.ly/oAavJ .

The New York Times reports that increasing numbers of LPs are cutting their staff.  Among those staff cuts includes multiple fund allocation staff.  We expect allocations to slow in two ways.  (1) New funds with limited experience will have fewer staff at LPs to review their allocation requests, (2) The cycle for worthy new funds and emerging managers will lengthen due to the absence of such staff.   David J. Morse, vice president for communications at Robert Wood Johnson said, "We need to be an organization whose grant making and administrative costs are those of an institution with $7 billion in assets, rather than one with the $10 billion in assets we had a year ago,”.   More info here, http://bit.ly/WRS0b

Likewise Harvard has recently cut 275 in addition to more than 500 persons who took early retirement in a special program this year.  Also, hiring freezes have been in place and a similar salary freeze.   More info here, http://bit.ly/DsY4K

Yet, the Greenwich Associates also reports that Pension Funds and endowments have been among the most active buyers of stakes in opportunistic funds.  Endowments seem to be moving towards more liquid assets which may bode ill for PE assets.  Other sources have said the in rebalancing portfolios, LPs have ridden the wave of emerging market ETFs which are highly liquid.  More information about the article is here, http://www.greenwich.com/ .  The Financial Times article follows, http://bit.ly/GsmgV

Mirroring the LP perspective, PE Funds of Funds (FOFs) are stating that they too are lengthening their due diligence cycles and digging deeper on critiques of funds that are looking for allocations.  FOFs are far more likely to use their own sources for evaluative purposes rather than references provided by GPs.  More info here, http://bit.ly/1SDmJ0