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West Palm Beach (HedgeCo.net) – Hedge funds, private equity firms are using “political intelligence” to monitor tax reform, SEC registration, TARP, TALF and PPIPs, according to the OSINT Group, a boutique advisory firm based in Washington specializing in “open source intelligence” (OSINT).
The US Federal Reserve, the Treasury Department, the SEC and Congress are all playing a major role in rapidly evolving monetary policy and regulatory change across the international financial marketplace, OINST said. Those institutions, along with the IMF and World Bank, make Washington DC the financial centre for policy decisions and breaking financial news.
“To understand what financial and political leaders are doing today and planning for tomorrow, institutional investors need to do more than monitor news and data services. They need to know more. They need answers to questions from a consistently reliable source of insight into the world of politics and policy,” said Michael Bagley, a principal with the OSINT Group.
“When you need to understand policy and politics accurately and consistently, we take the guesswork out of the analysis. Top corporations and foreign governments set a very high standard for the outside counsel they retain for managing risk and unearthing new opportunities,” Bagley said. “We consult with a group of experts from the ranks of lobbying, academia, industry, journalism and law who are skilled in every major area of policy and politics. Our ‘political intelligence’ unit is built on a single powerful idea: to provide institutional investors with accurate, actionable and timely information created by the currents of political forces and regulatory decisions.”
The group was established to assist government and commercial sector clients in the energy and financial industries with unique “open source” intelligence collection and delivery. In addition to technology used by the US Intelligence Community, the firm uses its network of relationships and personal connections in Washington to gather “political intelligence” for clients who need to better understand how the US Government will influence the international markets with new financial-sector regulation and legislation.
Alex Akesson
Editor for HedgeCo.Net Email: alex@hedgeco.net
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The Australian – HFA, which has $5.8 billion in assets, joins a long line of fund managers — including Perpetual, Babcock & Brown and Macquarie Group — in suspending redemptions from some funds this year as the credit crisis takes its toll on the value of fund assets.
Standard & Poor’s has placed 80 to 90 per cent of all the mortgage funds, property funds and fund of hedge funds it rates "on hold" this year due to changes in the redemption process.
HFA shares plummeted 55 per cent to 4.3c in local trade yesterday, taking the year’s decline to 98 per cent, after the company said it had stopped allowing withdrawals from the HFA Diversified Investments Fund, the HFA Octane Fund and the HFA Octane Fund Series 2 because of "deteriorating liquidity in underlying investments".
Business Intelligence Middle East – International Tax lawyers are urging private-equity and hedge-fund clients to restructure their partnerships so they can sidestep the higher taxes that president-elect Barack Obama has vowed to impose on their profits.
Obama’s promise to revive a failed 2007 bill forcing executives to pay rates of 35% or more instead of the 15% capital-gains tax has prompted lawyers to advise the firms to take measures such as setting up offshore entities. That would help circumvent higher taxes on so-called carried- interest profits that executives at the firms typically earn.
The lawyers say they are pressing their clients to act before the year’s end on the assumption that any law or regulatory change won’t apply before 2009.
“If you wait to do it, then to unwind or restructure later will be very difficult and trigger significant tax penalties,” said Mike Kosnitzky, who heads Boies Schiller & Flexner’s tax practice in New York and is advising clients.
New York (HedgeCo.Net) – Treasury Secretary Henry Paulson outlined a plan yesterday that may give some power to the U.S. government when hedge funds come to the end of the road.
Paulson said that in the event of trouble, he wanted “"additional powers to manage the resolution, or wind-down, of large non-depository financial institutions, such as larger hedge funds, so as to limit the impact of a failure on the broader financial system."
Paulson has long been an advocate of tighter hedge fund regulation and an increased authority of the Federal Reserve. He had recently stated that the Fed should have extended control over risky financial instruments such as hedge funds so that they may “intervene to mitigate systemic risk in advance of a crisis.”
This stance has made him the target of heightened criticism by those who think the government should cease to intervene in times of trouble, referring of course to the Fed backed purchase of Bear Stearns by JPMorgan. Though others say the bank’s demise never would have happened if two of its major hedge funds hadn’t collapsed that past summer. Since massive hedge fund implosions shake the entire economy, Paulson hopes that his plan can provide balance and regulation to quell those instances in the future.
"Over the last several weeks, the need to move more quickly toward an optimal regulatory structure that establishes a prudential financial regulatory system, focused on promoting long-term market stability has become all the more apparent," he added.
Though the speech didn’t directly target hedge funds, the rhetoric mirrored the tone of his recent attempts to vamp up regulation of risky investments and to shed light on the often ambiguous industry. He responded to critics saying, “I’m playing the hand I’ve been dealt.”
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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