Interactive Investor – The retreat of two high-profile activist funds from Japan underscores the difficulties such funds face in squeezing value from their investments and raises worries about lax corporate governance in the world’s second-biggest economy.

The Children’s Investment Fund (TCI) and Steel Partners have been scaling back since last year, joining a growing pool of foreign funds reducing exposure to Japan.

The departure also points to rising frustration among foreign funds that managers are not interested in maximising value, while domestic shareholders, often through complex cross-holdings, want to maintain the status quo.

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Tags: corporate governance, economy, frustration, interactive investor, investment-fund, investments, japan, pool, shareholders, steel partners, tci, worries

West Palm Beach (HedgeCo.net) – G8 Finance Ministers announced their endorsement of a global regulatory framework for financial institutions worldwide, "We agreed to create a coherent framework which builds on work done by the IMF, World Bank, OECD, FSB, FATF, and other international organizations, to strengthen the global market system." the G8 said in a statement on Saturday.

"To ensure effectiveness, we will make every effort to pursue maximum country participation and swift and resolute implementation. We have agreed on the objectives of a strategy, "the Lecce Framework", to create a comprehensive framework, building on existing initiatives, to identify and fill regulatory gaps and foster the broad international consensus needed for rapid implementation."

The Lecce Framework recognizes that there is a wide range of instruments, both existing and under development, which have a common thread related to propriety, integrity and transparency and classifies them into five categories: corporate governance, market integrity, financial regulation and supervision, tax cooperation, and transparency of macroeconomic policy and data.

Specific issues covered include, inter alia, executive compensation, regulation of systemically important institutions, credit rating agencies, accounting standards, the cross-border exchange of information, bribery, tax havens, non-cooperative jurisdictions, money laundering and the financing of terrorism, and the quality and dissemination of economic and financial data. International institutions and fora have already developed a significant body of work addressing a number of important issues in these areas, but, in many cases, the initiatives suffer from insufficient country participation and/or commitment, the G8 said.

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London Stock Exchange – Hedge funds that short stocks as part of their investment strategy should be forced to pay a levy to support research into the impact of the tactic on the markets, according to a new manifesto for the "fundamental reform" of corporate governance.

The document, published by corporate oversight and social responsibility consultancy PIRC, calls for the charge to be introduced alongside enhanced disclosure of listed companies’ pay and benefits, as well as binding shareholder votes on audit committee reports and remuneration policies.

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Tags: audit committee, committee reports, corporate governance, enhanced disclosure, fundamental reform, investment strategy, levy, listed companies, london-stock-exchange, manifesto, oversight, remuneration policies, shareholder-votes, social responsibility, stocks, tactic

West Palm Beach (HedgeCo.net) – Hedge fund manager Meridian Global Fund Services Group has launched a hedge fund consulting affiliate team with Joyce E. Heinzerling as head.

The affiliate, Meridian Fund Advisers LLC, will provide hedge fund regulatory and corporate governance best practices advice to hedge funds both within and outside of the Meridian Global client base. In this capacity, Heinzerling will work side by side with her extensive network of leaders in the hedge fund legal and accounting fields.

“As President of Meridian Fund Advisers, Ms. Heinzerling will lead the development and delivery of our new hedge fund consulting affiliate, and help bring us to a position of distinction in the hedge fund administration industry in terms of a value add for our clients," said Randy Troy, President of Meridian Fund Services (USA) LLC.

"Meridian Fund Advisers essentially has been established to broaden and strengthen our dedication to clients in an effort to provide the highest level of client service in light of the increasingly complex issues that now arise in the hedge fund industry resulting from the heightened regulatory environment and exposure to litigation," Mr. Troy added.

Heinzerling joins Meridian Fund Advisers after serving nine years as General Counsel, CCO and Head of Operational Due Diligence at Archery Capital LLC, an investment adviser to emerging manager funds of funds. Prior to joining Archery Capital, Ms Heinzerling spent fourteen years in private practice advising hedge funds, venture capital funds, private equity funds, and mutual funds.

Alex Akesson

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