International Herald Tribune – Hedge fund managers usually shun the spotlight. But five of them, billionaires all, are about to come under the glare on Capitol Hill.

The money managers — Philip Falcone, Kenneth Griffin, John Paulson, James Simons and George Soros — have been called by a House panel to discuss some of their trade secrets at a hearing on Thursday.

The topics are likely to range from the managers’ use of leverage — the borrowed money that fuels investment returns on the way up but can be devastating on the way down; their funds’ bets in the markets; and the managers’ pay.

Also front and center will be the matter of oversight, one of the most contentious issues confronting the loosely regulated hedge fund industry. Regulation, or the lack of it, has been an issue since the 1990s, but it has come to the fore this year as questions have swirled about hedge funds’ role in the financial crisis.

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Reuters – Traditional long-only mutual funds are set to dominate shareholder registers again as the hedge fund industry shrinks and retail investors continue to stay away, according to Morgan Stanley.

Meanwhile, with institutions, including hedge funds, deleveraging aggressively, emerging markets equity issuance is set to fall to 10 percent of total volume in Europe, Middle East and Africa in 2009 from one quarter this year, the bank told the Reuters Global Finance Summit.

"Traditional classic long-only funds, which used to be the main part of shareholder registrar in the 1990s, will become more important," said Emmanuel Gueroult, head of EMEA equity capital markets.

"The hedge fund industry is deleveraging…Access to credit is difficult."

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