Regulators have had hedge funds in their sights for a while and conventional wisdom predicts they may be even more heavy-handed after the $50bn (€36.5bn) alleged Bernard Madoff hedge fund fraud. But investors are pre-empting the regulators and demanding that hedge funds drop some of their secrecy to offer greater transparency of trades, pricing and portfolio valuations, say industry experts.

Sameer Shalaby, chief executive at hedge fund technology solutions provider Paladyne, said: "Regulatory oversight is imminent. We see regulators focusing on transparency and disclosure, and pricing and valuation. Registration is almost a given."