The outlook for hedge funds appears rosy with US pension funds likely to drive growth. Observers say the challenge for the industry is how regulations are evolved and implemented. These observations were made at the BNP Paribas Hedge Funds Centre at SMU's Hedge Funds Symposium. Director of the Centre, Assoc Prof Melvyn Teo says long-term investors, such as US pension funds, are expected to drive the hedge fund sector.