Funds Hub

After months of rhetoric by political leaders and behind-the-scenes manoeuvring by trade bodies, the hedge fund industry is finally set to learn its regulatory fate today.

Rightly or wrongly, G20 leaders thrashing out a plan to revive the global economy and prevent the excesses of recent years have hedge funds at the centre of their thoughts.

A draft communique from the Summit shows leaders will submit large hedge funds to supervision for the first time, while British finance minister Alistair Darling said today financial regulation needs to be “more intrusive” and to include hedge funds.

So far, so good for hedge funds, which have been expecting something like this for some time.

UK-based fund managers — the vast majority of the European industry — are already registered with the FSA, so this may not be such a huge step, although it will be interesting to see how the G20 distinguishes between the funds — largely based in offshore locations — and the management firms.

But with several hours of negotiations left to go, nothing as yet is finalised. Hedge funds must wait a while longer to find out how their future will look.