Global hedge fund managers are spending heavily to keep up with regulatory reforms, according to a recent survey.

New research released Thursday by the Alternative Investment Management Association (AIMA), along with the Managed Funds Association (MFA) and KPMG International, found that hedge fund managers “are making significant investments in their firms’ infrastructure to comply with new regulatory requirements.”

The survey, which was conducted between May and August canvassed 200 hedge fund managers representing more than US$910 billion in assets under management (AUM), found that firms have spent more than US$3 billion to date on compliance costs. Hedge fund managers were found to be spending anywhere between 5% and more than 10% of their operating costs on compliance technology, headcount and strategy.

It reports that the average spend on compliance was at least US$700,000 for small fund managers, US$6 million for medium-size fund managers, and US$14 million for large fund managers.

And, it found that these costs are creating a heavier burden on smaller firms, as smaller firms are spending more – both as a percentage of AUM and relative to operating costs – than larger firms.

Additionally, it found that North American firms report spending more on compliance (as a percentage of AUM) than firms in other regions. “In part, this likely reflects the already high compliance requirements in the U.S.,” it notes, ” versus the expected compliance requirements of the soon-to-be implemented [European regulations].”

Notwithstanding the cost, the survey also found that “more than half of the respondents believe that recent regulation has improved the strength, transparency and reputation of the market and improved investor protection.”