The scale and influence of hedge funds in the global financial marketplace has grown over the past decade. The number of hedge funds in the world was over 8,800 with total assets exceeding $1.2 trillion in 2006. This growth led to an in–depth review of hedge fund activities by the SEC that resulted in 2004 in the first significant regulatory filing requirement for hedge funds by the SEC. The ADV forms filed by hedge funds in February, 2006 have provided considerable information about major U.S. based hedge funds, particularly with respect to operational risks that include potential conflicts of interest, ownership and capital structure and past legal and regulatory actions involving the management firm or related advisors.
(The rest is omitted.)