Hedge funds, somewhat like mutual funds but without much of the burdensome regulation and responsibility, are attracting huge investments, and throwing that weight around. Recently, hedge funds havebeen pushing to gain access to a European bond trading network, and a London-based fund is pushing Dutch bank ABN Amro to, in the words of the president of the Dutch central bank, “work out what youare going to sell, but send the proceeds to us.” This, with a one percent stake in ABN.
At State Street Bank, a Boston bank which is the world’s largest custodian of financial assets, London-based managing director of global research Avinash D. Persaud has been responding to the “BaselII” proposals to rein in the hedge fund industry. On a personal note, according to Businessweek, he has found hedge fund managers “a bit arrogant,” an opinion shared by a growing number in thefinancial world. A hedge fund information website, hedgeco.net, speaks glowingly of the benefits hedge funds offer to investors, and laments attempts to regulate the funds as contrary to theirfree-spirited nature.
