Independent – Man Group, the world’s largest quoted hedge fund, unveils annual results this week that are expected to be its best ever. Like the entire hedge fund industry, it has been on an amazing run. In 2000 Man had $4.7bn (£2.5bn) under management; today it has more than $43bn.
But this stellar growth won’t be grabbing all the attention at the results. Sharing centre stage will be a potential lawsuit in the US, where its American arm stands accused of abetting an alleged $140m fraud by a Philadelphia hedge fund.
It is not alone among hedge funds in feeling the heat. Calls for greater transparency in the industry, and tighter control, are growing louder. That trend has been exacerbated by the market turmoil in recent weeks – something that may have been influenced by these funds.
After years of operating in anonymity, unfettered by regulation and fabulously remunerated, hedge fund managers face a tide of new rules – and they don’t like it. They claim that the light regulatory regime in the UK is crucial to the industry’s success, and any change to this could be damaging. “Managers are worried. They have an incredibly profitable franchise and regulation poses the biggest threat,” says an industry source. “The [regulators] have life or death power over them.”
