Each business day HedgeCo.Net keeps you informed with the top hedge fund industry news, opinion and insight from around the globe. From the latest hedge fund launches, to the impact of regulation, competition, and investor activism - we track the topics and people that make a difference to you.
Bloomberg – The Group of 20 leaders will agree on new rules to rein in hedge funds and may more than double the resources of the International Monetary Fund, U.K. Chancellor of the Exchequer Alistair Darling said.
“There is a recognition that some hedge funds are systemically important,” Darling told Bloomberg Television in an interview today in London. “There will be an agreement there. Where you’ve got something that’s systemically important like a hedge fund, you need to know what’s going on there.”
Prime Minister Gordon Brown has struggled to allay the concerns of German Chancellor Angela Merkel and French President Nicolas Sarkozy as they press for a crackdown on traders and lenders. Darling’s comments suggest consensus is now emerging among G-20 leaders in the London talks on measures to combat the financial crisis.
EasyBourse.com – The U.S. and Germany are going "in the same direction" ahead of next week’s G20 summit, a spokesman for Chancellor Angela Merkel said Friday amid reports of rifts between Europe and the U.S.
There are "no points of contention here between us and the U.S. government. For both of us, and our position has been made clear for some time, regulation of financial markets is the focus of the meeting," the spokesman said after Merkel and U.S. President Barack Obama held a video conference Thursday.
"The proposals that (U.S. Treasury Secretary) Timothy Geithner has put on the table when it comes to regulation of certain players – hedge funds and others – show that we are proceeding together in the same direction," spokesman Ulrich Wilhelm told a regular press briefing.
In Obama’s first trip to Europe since being elected, the Group of 20 summit on April 2 – which brings together major industrialized and developing nations – takes place against the backdrop of the worst financial crisis in decades.
New York (HedgeCo.Net) – Hedge fund regulation was the hot topic at this past weekend’s meeting of European Union leaders, when German Chancellor Angela Merkel hosted a summit in Berlin discussing ways to curtail the financial crisis.
Merkel joined leaders from The Netherlands, Spain, France, Italy, England, the Czech Republic and Luxembourg to agree on a unified EU stance prior to London’s G20 Summit in April, where all the world’s leaders will come together to discuss the financial crisis.
"We have today underscored our conviction that all financial markets, products and participants must be subject to appropriate oversight or regulation, without exception and regardless of their country of domicile,” said Merkel. “This is especially true for those private pools of capital, including hedge funds, that may present a systemic risk," she said, although the details of how hedge funds should be regulated still need to be worked out.
English Prime Minister Gordon Brown has also expressed his belief that there should be tighter regulation, despite the fact that London is Europe’s premier center for hedge funds.
"Together we will support oversight of under-regulated sectors and I also support proper disclosure and transparency of hedge funds," Brown said earlier this month.
French President Nicolas Sarkozy agreed, saying, “We want regulation of hedge funds, and we’re not going to put up any longer with the bonus reward system of traders and bankers.”
The EU leaders are scheduled to meet again this Sunday.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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Bloomberg – A group of hedge funds offered to increase disclosure to head off demands from politicians on at least two continents for more transparency.
“We know which way the wind is blowing,” said Andrew Baker, chief executive of London-based Alternative Investment Management Association, the industry’s largest lobby group. “We see a lot of this as inevitable and we’d like to put ourselves in a position to say, ‘You don’t have to drag this out of us.’”
European leaders meeting in Berlin on Feb. 22 said they want to subject the $1.4 trillion industry to more regulation because hedge funds “may present a systemic risk” to world economies, according to German Chancellor Angela Merkel.
Economic Times – European leaders meeting in Berlin on Sunday backed oversight of the world?s financial markets and products, including hedge funds, and urged that sanctions be drawn up to punish tax havens.
A copy of the “chair’s summary” from a summit hosted by Chancellor Angela Merkel and seen by Reuters describes the situation in financial markets as “fraught” and says structural reforms and a focus on public spending are needed to emerge stronger from the global crisis.
Independent – European leaders backed major reform of hedge funds yesterday as part of structural changes to help the world’s financial institutions emerge stronger from the global economic crisis.
Short-selling by the secretive hedge fund industry — selling borrowed stock in the anticipation that the prices will fall — was blamed by some politicians for exacerbating the banking crisis and economic meltdown.
A copy of the summary from the summit hosted by German Chancellor Angela Merkel in Berlin said banks should bring in reforms to ensure they build up a buffer of resources in good times and called for sanctions against tax havens.
West Palm Beach (HedgeCo.net) – Noci Pictures Entertainment has launched a one-stop global film finance and production service consulting division. The fund is aimed at hedge funds, ultra high net worth investors, tax credit buyers, purchaser representatives, family offices, and private equity firms.
According to Noci, "Many established filmmakers and agencies involved in independent film finance and packaging face the same dilemma of throwing multiple film projects against the wall and hoping one will stick with a limited number of studios and private equity."
With a plethora of incentives ranging from United States state and federal tax incentives that in some instances can be monetized upfront to cover a portion of a budget and offset risk to private equity investors, to overseas co-production incentives that can be maximized to finance quality films, Noci Pictures Entertainment’s stratrgy is to be a one stop resource, including arranging debt finance, foreign sales agency representation, talent packaging, and more.
Countries such as Canada, UK, Ireland, South Africa, Germany, Australia, And New Zealand have film finance incentives that can be accessed to finance any number of film projects, according to the company.
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West Palm Beach (HedgeCo.net)- The EU Parliament has come up with new guidelines regarding hedge fund transparency and ‘asset stripping’. Also proposing some investigative measures and rules so that companies are not left in the dark on the investment policies of hedge funds or private equity investors who buy up their shares.
They also want much more light to be shed on pay and bonus packaged for fund managers. The commission also asked that the EU address the issue of money laundering, specifically in the context of hedge and private equity funds.
MEPs in committee unanimously approved the report by Klaus-Heiner Lehne (EPP–ED, DE) which would – if approved by the plenary – become a formal request to the Commission to put forward EU legislation.
The EP committee proposes to oblige hedge funds and private equity funds to disclose and explain the companies whose shares they acquire or own, retail and institutional investors, prime brokers and supervisors – their investment policy and the associated risks.
The committee also asks the Commission to investigate the possibility to apply, to alternative investments, contract terms allowing for a clear limitation of risk, for measures to be taken if thresholds are exceeded, for a clear description of lock-up periods and for explicit conditions concerning cancellation and termination of investment contracts.
MEPs want the Commission to propose rules forbidding "asset stripping" by investors who misuse their financial power in a way that merely disadvantages the company acquired in the long term, without having any positive impact on its future – or the interests of employees, creditors and business partners. They therefore propose common EU rules to guarantee capital maintenance of companies.
Regarding private equity funds, Members in committee suggested, among several proposals, that the Commission should address the issue of irresponsible lending to private equity funds, where banks disclaim any responsibility for what the loan is used for and where the money that repays the loan comes from.
