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Reuters – A minister of EU president Sweden said on Friday progress was being made on the contentious issue of European hedge fund regulation and that he was optimistic a deal might be reached in the coming months.
“My view is that we are making progress,” Swedish Financial Markets Minister Mats Odell said in a Reuters interview.
“I’m an optimist by nature though I’ve also learned that you need to be realistic. But I think there is scope for reaching an agreement during the Swedish EU presidency, though I can’t be sure.”
Citywire.co.uk – Fund selector Christian Lundström, from Independent Investment Group in Sweden, is welcoming the evolution of the Ucits III space which is seeing more and more hedge fund groups entering the area.
Last week, HSBC Asset Management’s Farley Thomas warned on the trend of hedge fund groups launching Ucits-compliant funds, saying ‘Ucits is about trust, so retail fund firms in Europe should be protective of Ucits. Will the hedge fund firms be there to hold retail investors’ hands when things go wrong?’
While there may be fears for retail investors accessing such funds, many selectors are greeting the changes with open arms. Lundström is excited by the opportunity to access strategies which can ‘generate portfolio returns with low or even negative correlation to equities and commodities.’
The Independent – Grimly aware that a European Commission crackdown on regulation of hedge funds and private equity spells disaster for the EU’s predominantly London-based industry, Treasury ministers have been desperately lobbying their counterparts in Brussels for months, but their pleas have fallen on deaf ears.
Now, however, the Americans have woken up to the fact that many of their hedge funds would find it impossible to do business in the EU under proposals for regulatory reform. In recent weeks, US Treasury officials have thus been touring the EU, letting their displeasure be known.
It appears that the Americans’ involvement is already paying dividends. Sweden, which holds the EU presidency, was quietly letting it be known yesterday that it will ensure some sort of compromise is brokered. The Alternative Investment Management Association, which represents the sector’s interests, now thinks disaster may be averted.
guardian.co.uk – A minister for Sweden, which took over the EU presidency on Wednesday, said hedge funds and private equity firms needed regulation but should not be viewed as a primary cause of the global financial crisis.
Speaking after a visit by the European Commission to Stockholm to mark the Nordic country’s start in the six-month presidency, Financial Markets Minister Mats Odell cautioned against "overzealous" regulation.
What was needed, he told Reuters, was well-considered, balanced regulation that helped avoid systemic risk.
"I believe there is an exaggerated view in some countries that private equity and hedge funds helped pull us into the crisis," Odell told Reuters.
CNBC – People who invested with Bernard Madoff were greedy and happy to accept high returns without probing too much in the way these were achieved, Hugh Hendry, chief investment officer at hedge fund Eclectica, told CNBC Tuesday.
"I’m sympathetic for people losing money but I think this pejorative term of being greedy still applies," Hendry told CNBC.com. "There was an implicit greed in not questioning and just accepting unnatural returns."
"They didn’t show the requisite amount of fear that would have generated the curiosity to investigate," he said, adding that for every one Madoff investor, there were ten who stayed on the sidelines.
SmartBrief – Britain and Sweden, which takes over the EU’s rotating presidency on 1 July, agreed to work together to explain to other European nations the value of private-equity firms and hedge funds. The UK is concerned that one proposal could force hedge funds away from London.
Wealth Bulletin – Paul Myners has vowed to fight “tooth and nail” to revise a directive from Brussels that would give the European Union the power to set limits on how much hedge funds are allowed to borrow.
The draft legislation has triggered panic in the industry and prompted several senior figures to threaten to leave London unless the legislation is radically altered.
Myners will meet Sweden’s deputy finance minister in 10 days to seek changes to the directive, as Sweden prepares to take over the EU chair from Czech Republic on July 1.
