Funds Hub

Money managers under the microscope

Myners’ let-off for hedge fund pay

There’s been plenty of confusion over who exactly will be hit by the ‘supertax’ on banker bonuses. RTXRWCW

Myners spends a lot of time reading blogs. REUTERS/Paul Hackett.

The wording of the Treasury’s clampdown last week suggested some hedge funds and traditional asset managers could be caught — PwC’s John Terry told me that of the 20 hedge funds he had spoken to, around half may have been caught in the net.

However, hedge funds are to fall outside the supertax, confirming a rumour doing the rounds among hedge fund executives.

Speaking at Reuters’ London offices this morning, City minister Paul Myners clarified that the tax would be focused on “the activities of banking”.

AIMA claims “broad consensus” on EU hedge fund directive

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For UK-based opponents of the controversial EU hedge fund directive, there are signs the draft could be overhauled.

rtrrzy9Hedge fund industry body AIMA said today “there is now a broad consensus among European policymakers that the directive does need a lot of work and that there will be significant revisions”.

Hedgies sit on the fence

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There has been much debate about whether London’s hedge fund community, angry at plans for a 50 percent tax rate on top earners and the EU’s draft directive proposing tough controls on the sector (not to mention the usual problems of traffic, high property prices and quality in life in London that usually get raised), will head to low-tax Switzerland.

rtr273vjOur analysis today argues that, while a trickle have already left, there are far more who have upped the rhetoric but are simply waiting to see who wins the next election.

Moonraker finds hedgies have a Goldfinger

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With a headline like that, you’d think this would be a story about investing in Bonds.

rtxge4zBut in fact a survey by boutique fund firm Moonraker Fund Management shows U.S. hedge fund managers are buying physical gold to protect their wealth against high levels of inflation.

Dale Gabbert: Drive-by shooting misses regulatory target

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Guest blogger Dale Gabbert heads the funds group in the London office of law firm Reed Smith. His practice covers hedge funds, private equity and property funds and he is the author of Hedge Funds, a legal guide published by Butterworths Lexis Nexis.

The views expressed here are entirely the author’s own and do not constitute Reuters’ point of view.

GAIM 2009: Paranoid? You should be…

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Funds face new levels of scrutinyIt doesn’t take a genius to work out that the hedge fund industry has changed markedly over the past year — a quick glance at delegate numbers here in Monaco shows that.

 

But one means that shows quite how drastic the change has been is in the area of risk management — not normally the sexiest topic but now an area of real concern for investors.

A hectic schedule

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The hedge fund circuit can be exhausting.

rtxfqrlLast Thursday saw the plush fundraising dinner of ARK, the charity headed by Arpad Busson, fiance of Uma Thurman, at London’s Waterloo International.

The next date in the European hedge fund industry’s diary is next week’s annual GAIM conference, held in Monaco (where else?).

Levered out

With the finalisation of new EU laws on regulation of hedge funds and private equity likely 6 months away, we should be prepared for an awful lot of hand-wringing and much talk of an industry exodus to lakeside retreats in Switzerland.

The latest word on this is that some managers have warned the Treasury that funds are already looking around for alternative locales where their love of leverage attracts less concern.

Nickels and black swans

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Some investors may not be fully aware of the risks they face as career-conscious hedge fund managers plump for strategies that build a convincing-looking track record but occasionally backfire badly.

rtr1b3szAccording to a paper by Yale academic Hongjun Yan, hedge fund managers are far more likely to choose so-called ‘nickel’ strategies than ‘black swan’ strategies, even if returns are ultimately lower and they risk the occasional huge loss.

Managing for the future

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One thing that the credit crisis has demonstrated is that even performing well isn’t always enough to stop investors in need of cash from taking their money out of a hedge fund.

rtr5afThe industry had its worst year on record last year, losing nearly 20 percent in performance terms, but not everyone lost money.

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