@ William

Many thanks for your input. While regulation is needed, including asset managers, it is about effective rather than the volume of regulation. The burden of regulation is clear post-crisis and a structural change is still on-going. As such it is more the unintended consquences of regulation that is an issue. Unfortunately as with anything there is no crystal ball. Therefore, regulation should be "fine tuned" (Alan Greenspan).

In my opinion event-driven funds are evidence of the need of illquidity. This is due to trade positioning and the damage to the fund in the event of heavy redemptions.

On a lighter note, @Scott I do also think something is on the horizon. As the recent oil crash gives a signal of things to come. Wouldn't be surprised on another US equity crash in 2 years. Once we begin to see more a recovery in cyclicals. However, I think any crash would be a black swan event similar to the Swiss Franc event.