Hedge funds are somewhat secretive compared to other investment vehicles. Now S&P wants to help change that through their ratings system.

Standard & Poor's on Tuesday released enhanced criteria for rating hedge funds, a market segment expected to grow as investors and regulators press for greater transparency.

The updated criteria include more quantitative analysis and more focus on operational risk, including such issues as trade processing and risk management, said Tanya Azarchs, a financial institutions credit analyst at S&P.

Increased transparency will be good for the industry as a whole because it will attract a class of investors that currents steers clear of hedge funds.