LaCrosse Global to Buy BofA-Merrill Fund-Admin Business

And investors want to know, specifically, what third party administrators are doing. While investor due diligence was always part of the process, Kundro says operational due diligence (ensuring quality auditing services, technology and that the money invested is actually real) are increasing in popularity.

Kundro says maybe a dozen investors were interested in operational due diligence prior to Madoff, but he expects 100 investors to visit his offices this year.

He adds there is also increasing sensitivity around costs and fees.

"It's not that the standard 2-and-20 is done," Kundro said, referring to the 2% management fee and 20% of the profits hedge fund managers usually charge. "It's that there might be more give and take, meaning they might reduce those fees in exchange for a longer lock-up period."

The transaction is subject to regulatory approval in various jurisdictions and other customary closing conditions.