LONDON (Reuters) – CCredit ratings agencies are working on boosting coverage of hedge funds in response to a growing need for transparency in the sector, but face analytical problems and, ironically,a lack of transparency in doing so.<\/p>\n
Regulators around the world have been making ever louder noises about boosting transparency in the $1.2 trillion (640 billion pounds) hedge fund industry, with credit ratings seen as one way of providing an outside assessment of funds’ standing.<\/p>\n
The big three agencies already assign some ratings to hedge funds, although these are mainly to do with operational risk than credit risk or a fund’s performance.<\/p>\n
Standard & Poor’s is working on a new set of criteria for rating hedge funds that is set to be published by the end of the year, a senior official at the agency said on Thursday.<\/p>\n
“It’s a high-priority sector for us to develop,” said Scott Bugie, a managing director in the financial services group at Standard & Poor’s. “But it’s a tough industry, very challenging analytically.”<\/p>\n