Herbert Smith's hedge fund practice has received a profile boost after advising a group of leading UK hedge funds on the formation of a code of industry guidelines aimed at introducing more transparency.

The top 10 City firm advised a working group on the creation of the high-profile transparency code, with investment funds partner Nigel Farr leading the team.

The Hedge Fund Working Group – which includes hedge fund managers such as Cheyne Capital, Lansdowne Partners, RAB Capital and Man Group – unveiled the code last week as part of a report into self-regulation of the industry.

Herbert Smith was instructed by the chair of the working group and former deputy governor of the Bank of England, Sir Andrew Large, to assist on a number of legal and regulatory issues concerning the report's best practice standards and other related issues.

Herbert Smith has a well-regarded closed-end retail funds team but is less well known in the mainstream hedge funds arena, which is traditionally dominated by firms such as Simmons & Simmons and Dechert.

The standards are aimed at addressing some of the criticisms levelled at hedge funds, encouraging fund managers to have their portfolios independently reviewed and clarify the risks involved for investors.

The proposals centre on the establishment of a new Hedge Fund Standards Board, which will oversee the new standards among signatories to the code. However, the body will not have powers to sanction firms that do not comply.

The 14-member working group is hoping that more UK hedge funds will now sign up to the code with a view to harmonising standards among funds internationally.

Darren Fox, a hedge funds partner at Simmons, which was also involved during the consultation process, commented: "This is an attempt by the industry to create standards rather than have them imposed by the Financial Services Authority. There is not an absolute requirement to comply, but a lot of our clients were asking what this would mean for their liability."

The establishment of standards follows a similar route taken by the UK's private equity industry, which published standards for disclosure and transparency last year drawn up independently by the banker Sir David Walker.

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