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Reuters – Man Group, the world’s largest listed hedge fund firm, is likely to extend the independent valuation of its flagship AHL strategy to calm investors spooked by Madoff, sources familiar with the matter said.
AHL, a $25 billion (16 billion pounds) family of managed futures funds which bet on trends in global futures markets, currently uses a mixture of internal and external administrators to value its constituent funds, which tend to be in liquid and easier-to-value markets.
However, with investors more focused than ever on independent administration in the wake of the fraud by U.S. financier Bernard Madoff, Man is ready to embrace a greater balance of third party input.
Wealth Bulletin- In January, 14 of the UK’s largest hedge funds, including Man Group, Brevan Howard and Gartmore, backed the Hedge Fund Working Group’s best-practice standards.
These aim to improve governance and disclosure and to promote transparent and independent valuation.
Six months on, however, only one, unnamed, hedge fund beyond the 14 working group members, has signed up to the code.
Sir Andrew Large, chairman of the working group, believes it is unrealistic to expect hedge funds to sign up immediately.
Wealth Bulletin- A spokesman for the HFWG confirmed last week that the guidelines, which were aimed at raising governance levels across the traditionally secretive industry, have found no support beyond the original 14 signatories – including Man Group, Brevan Howard, Och-Ziff Capital Management and CQS.
At the publication of the 28 principles more than five months ago, HFWG chairman Sir Andrew Large had urged investors to help take the matter forward, adding that this was essential to ensure a wide adoption of the disclosure-based voluntary initiative.
The Independent – Hedge funds have given a voluntary code for the industry a collective thumbs-down – not a single firm has signed up to the compliance standards since they were launched in January.
Nearly five months ago the Hedge Fund Working Group (HFWG) published a raft of recommendations for the sector that were intended to raise governance levels across the traditionally secretive sphere. But a spokesman confirmed last week that no hedge funds had signed up to abide by the proposals beyond the original 14 signatories, including Man Group, Brevan Howard, Och-Ziff Capital Management and CQS.
An HFWG spokesman said the body’s priority was the appointment of a permanent chair, adding that it was speaking to a number of groups that could possibly sign up to the standards.
At the publication of the guidelines in January, Sir Andrew Large, chairman of the body, said: "Now it is up to investors to help take this forward. This is a voluntary, market-led initiative based on disclosure. It is investors who can provide the market discipline to ensure these standards are widely adopted."
In April a survey by the accountants KPMG revealed that eight out of 10 pension funds favour investing with a hedge fund manager that has complied with the 28 principles of the standards set out by the HFWG. More than 50 per cent of funds surveyed said they would require hedge fund managers to comply with the standards within three years.
News of the response to the voluntary code comes as the European Parliament assesses proposals to toughen up legislation linked to the industry. The former Danish prime minister, Poult Nyrup Rasmussen, is leading a group of MEPs calling for greater openness and scrutiny of hedge funds and private equity groups.
