The evolution of the hedge funds industry towards institutionalisation and more mainstream products could be the future, according to some industry leaders. Regulation is, however, a concern.

Hedge Funds Review asked leading members of the hedge funds industry where they thought the hedge funds industry and the jurisdiction itself would be 10 years from now.

David Harding, founder and managing director at Winton Capital Management, expects to see hedge funds become increasing seen as a traditional investment over the next decade. He also expects existing hedge fund management companies to start looking at increasing their range of products into more traditional areas.

At Thames River Capital, Ken Kinsey-Quick, head of multi-manager alternatives, agrees hedge funds will become more mainstream in future while Andrew Ross, CEO of Cazenove Capital Management, says there will just an “an asset management industry” in future.

Peter Rigg, head of alternative investment group at HSBC Private Bank, sees a solid future for the industry and said regulation will increase “hopefully that will be done in a sensible fashion”.

“I think it’s possible that the term hedge fund won’t even exist any more,” said Elizabeth Para, currency investment strategist at Overlay Asset Management. “We are already seeing such a blurring of the lines between traditional fund managers and hedge funds,” she added.

At Apex Fund Services, Peter Hughes, group managing director, expects a “very different landscape for fund administrators” by 2020. He said the existing models will need to change, particularly to take into account increased regulation.

Aleks Kins, president and CEO of AlphaMetrix, said he thinks the industry will continue to grow significantly over the next few years, albeit at a slower pace. “I see the trend of hedge funds moving more towards a mutual funds model where there is much greater liquidity, much greater standardisation and therefore much greater demand across a far wider audience of investors,” he concluded.