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.
Reuters – A switch by some big investors chastened by the Madoff scandal and the credit crisis into managed accounts at hedge fund firms could end up penalising smaller clients in mainstream funds.
Managed accounts offer greater visibility and flexibility for larger investors such as funds of funds and big institutions by giving them direct ownership of underlying assets and the option to sell the portfolio if they want to get out quickly.
Guardian Unlimited – Aspects of a planned European Commission directive to regulate hedge funds do not go far enough and must change to protect investors, French Economy Minister Christine Lagarde said in remarks published on Monday.
The commission is due to publish its draft directive on governing hedge funds on Wednesday, against a backdrop of growing political pressure for increased regulation of institutions seen as posing systemic risks.
"The good side of the directive being prepared by the commission is that it establishes (a) surveillance (system) on hedge funds," Lagarde told French daily Le Figaro.
Jerusalem Post – While the recent G-20 summit in London provided world financial leaders with the opportunity to begin charting a path of recovery for the ailing global economy, the work to build the markets up and to ensure that a crisis like this never happens again will be left to the world’s securities regulators. Regulators around the world, due to their supposed lapse of supervision on the international securities industry, have come under fire for their role in allowing the crisis to occur.
Here in Israel, the country’s chief securities watchdog, Prof. Zohar Goshen, chairman of the Israel Securities Authority, has also been a center of attention with the publication of his "Goshen Plan," an ambitious agenda that seeks to restructure the local corporate bonds market by giving institutions a government guarantee covering 75-80 percent of new corporate bonds issued. This means the institutions will bear 20% of any loss, with the government bearing the rest.
CNBC – Man Group , the world’s largest listed hedge fund firm, said funds under management are $47.7 billion, down 11 percent from end-December, as clients pulled out assets in the face of falling markets.
The firm said net client outflows for the three months to March are estimated at $3.2 billion, with both private investors and institutions pulling out assets.
LONDON (AP) – Britain’s financial services watchdog proposed sweeping changes to global banking regulations on Wednesday, including a crackdown on the "shadow banking" activities of institutions like hedge funds.
The government-commissioned banking services report recommends new rules on a wide range of issues from increased requirements on banks on holding capital to stricter controls on bankers’ bonuses to discourage excessive risk taking.
Financial Services Authority chairman Adair Turner said that the market economy remained the best means of delivering global prosperity, but major changes in regulation and supervision were required to ensure that it is focused on the needs of businesses and households rather than taking risks for quick return.
The report embraces actions necessary in Britain and also discusses those that would require international cooperation. Britain will host an April 2 summit of the Group of 20 rich and developing countries that will discuss ways to address the world financial crisis, including more regulation
Business24-7 – Middle East hedge fund investors expect emerging markets, the US and Asia (excluding Japan) will outperform in 2009 despite economic downturn, according to a survey conducted across the Mena region.
The survey, conducted by an investment placement specialist Capintro Partners, said the family offices are allocating a larger percentage of their portfolio to hedge funds than to other institutions. It said investors in the region prefer funds with larger asset sizes, longer track records and higher levels of liquidity.
Reuters – Hedge funds, credit rating agencies and all other important market players should be subject to regulation based on a global approach, European Central Bank President Jean-Claude Trichet said on Monday.
The worst financial crisis in over 80 years has sparked a rethink of how markets should be supervised to cut excessive risk-taking by banks.
"The current crisis is a loud and clear call for extending regulation and oversight to all systemically important institutions — notably hedge funds and credit rating agencies — as well as all systemically important markets — in particular the OTC derivatives market," Trichet said.
"What is currently under discussion is the precise way in which these elements should be integrated within an overall regulatory framework," he told a conference on supervision.
Bloomberg – The victims of Marc Dreier, the New York lawyer charged in a $400 million fraud, included Amaranth Group Inc., Perella Weinberg Partners and Blackstone Group LP’s GSO Capital Partners, U.S. prosecutors said.
Government lawyers identified the firms in a court filing in New York on Feb. 9 as three of the 20 institutions they claim are victims of Dreier’s thefts. Prosecutors didn’t disclose how much it alleges each of the companies lost.
Prosecutors say Dreier, 58, persuaded two hedge funds to give him more than $100 million by falsely claiming he was selling notes issued by Sheldon Solow, a New York developer, at a discount.
Reuters – A consortium of private equity and hedge fund firms, including J.C. Flowers & Co, is close to a deal to buy the assets of failed mortgage lender IndyMac, a source familiar with the matter said on Sunday.
The prospective buyers also include Dune Capital Management, a private investment firm run by former Goldman Sachs executives, and hedge fund Paulson & Co, the source said.
The consortium would buy the bank and its 33 branches, IndyMac’s reverse-mortgage unit and a $176 billion loan-servicing portfolio, the source said.
The presence of private equity and hedge fund firms comes after the FDIC said last month it was expanding the pool of qualified bidders to include those institutions that do not currently have a bank charter, although they must have conditional approval for a charter from the responsible agency.
