Standardization Can Mean Lower Margins for Hedge Funds

Rhode Island-Standardization of new products will make it more difficult for certain types of hedge funds to make profits, according to panelists at the World Financial Information Conference in Rhode Island in September.

The panelists said there is a tension in the market, with standardization being seen as a time saver at the clearing and back-office side, but potentially reducing opportunities for the front office. "If there is that much efficiency the margins become smaller," said one pan