West Palm Beach (HedgeCo.net) – The Alternative Investment Management Association (AIMA), announced plans to mobilise the world’s hedge fund industry on the European Commission’s draft directive for Alternative Investment Fund Managers.

“There are provisions in this directive with potentially serious consequences for managers, investors, service providers and advisers internationally." Andrew Baker, AIMA CEO, said, "As the global trade body for the industry it is right therefore that AIMA takes the lead in mobilising resources in order to secure the best possible outcome for the industry on the directive."

"The feedback we’re getting from our members, who manage more than 75% of hedge fund industry assets globally, is that the draft directive has created enormous confusion. Because of the lack of proper consultation the directive presumes a structure for the industry which bears little relationship to reality. Implementation in its current form could prove to be unworkable. It also appears to be in conflict with much of existing EC financial services legislation." Baker said.

"We will therefore call for urgent effort to be devoted to re-drafting this directive." Baker continued, "To achieve this, AIMA will be announcing a series of initiatives to mobilise the industry. We will not oppose everything in the directive; some of the provisions, such as manager authorisation and registration, are already supported by us and measures which increase transparency to assist the authorities in the understanding of systemic risk issues are to be welcomed."

"We want to work with the Commission, EU governments and the European Parliament on this. We are not opposed to the directive per se, we just want the final directive to be practical and realistic.” Baker concluded.

Tags: accredited-investors, aima, alternative-investment-management-association, andrew baker, best possible outcome, draft directive, european parliament, financial services legislation, global trade body, hedgeco, investment fund managers, investment management association, investors service, proper-consultation, quot quot, reality implementation, risk issues, systemic-risk, urgent effort, west palm beach

Stuff – The drafting of the European Commission’s directive on hedge funds was a rush job without proper consultation and looks to have been subject to "undue political pressure," an industry body said.

The Alternative Investment Management Association said it was concerned about the way the Alternative Investment Fund Managers directive, covering hedge funds, was drafted. The publication of the draft directive has been postponed from this week to Wednesday, April 29.

Read Complete Article

Tags: alternative-investment-management-association, april-29, draft directive, european commission, investment fund managers, investment management association, proper-consultation, rush job

DealBreaker.Com – Morgan Stanley and Goldman Sachs are linking their lending to hedge funds to the market’s assessment of the credit worthiness of the investment banks. Morgan Stanley will reportedly evaluate the amount of leverage it will supply to hedge funds based on the price of its own credit insurance pricing. Goldman is said to be linking its willingness to provide loans to hedge funds based on its bond prices.

The report of both changes ran in the Financial Times. The changes would limit the ability of hedge funds to borrow from either firm if borrowing by Morgan and Goldman became too expensive, indicating a lack of market confidence in the financial health of the firms.

In one sense, this seems a practical response to volatility in the credit markets, reducing exposure to hedge fund leverage as credit markets for financial companies become unsettled. It does, however, create a self-serving dynamic for the investment banks. If hedge funds taking the view that the companies have become unstable push up CDS or bond yields on the firms, they may find themselves unable to borrow from the firms. In other words, it gives the hedge funds an incentive not to bet against Goldman and Morgan.

Read Complete Article

Tags: arthur-sulzberger, gm, institutional-marketing, investment-funds, mortgage-lenders, one-fifth, political-progress, proper-consultation, raanan-agus, s-books, squeeze, staffers, subsidiaries