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Bloomberg – The European Union’s plan to regulate hedge funds will cost the bloc’s pension industry about 25 billion euros ($36 billion) a year, the Alternative Investment Management Association said.

The proposed law would drive pension funds toward more traditional assets such as equities and bonds or cut the returns on their investments in hedge funds and private equity, London- based AIMA, the largest trade group representing the industry, said in a statement today.

“This is an estimated figure but it shows the potentially enormous impact that the directive could have on Europe’s pension funds and in the longer term, Europe’s pensioners,” AIMA Chief Executive Officer Andrew Baker said in the statement.

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West Palm Beach (HedgeCo.net) – UK asset management group and hedge fund investor Aviva plc ("Aviva") is holding an investor and analyst briefing to announce the strengthening of its protection against further falls in global equity markets through increased hedges.

Such that even in the event of a further 40% fall in equity markets, its surplus regulatory capital would only be reduced by £0.7 billion ($1.1 billion). This is a significant improvement when contrasted with the position as at 30 June 2008 when a 40% fall in equity markets would have reduced the surplus regulatory capital by £1.3 billion ($2.2 billion).

"We are focused on accelerating transformational change to deliver a unified and more profitable company," Andrew Moss, CEO, commented, "This is clearly demonstrated both by the creation of Aviva Investors and the reshaping of our UK General Insurance business to focus on insurance excellence and deliver the promise of scale."

Moss also said, "We are pleased to confirm that in the face of the recent market turmoil, Aviva’s capital position remains strong. Our active capital management ensures the group remains robust in the face of the current economic adversity, providing security for our customers and investors alike, and ensuring that the group is well positioned as confidence returns."

Moss will take the opportunity to provide an update on Aviva’s continuing strong position in the current economic environment with Aviva’s surplus regulatory capital estimated to be £1.9 billion ($3.2 billion) at 30 September 2008, compared to £1.8 billion ($3 billion) at 30 June 2008.

Alex Akesson

Editor for HedgeCo.Net
Email: alex@hedgeco.net

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Reuters – The British arm of asset management group Aviva Investors is betting that investor interest in hedge fund-style products will survive the credit crisis and rebound once market turmoil abates.

Paul Abberley, UK CEO, told Reuters Aviva Investors would boost its high alpha and absolute return business in the coming months and expand its investment team across the board.

Hedge funds and similar products have come under scrutiny as investors question how modest performance in a market turmoil chimes with the high fees charged by the industry. Hedge funds claim to be able to generate returns in bad times and good.

Abberley, CEO of Aviva’s London office since the beginning of August, said: "We believe clients will look for more higher alpha (excess returns) products than in the past and we need to be able to offer excellence in those areas."

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