Money managers under the microscope
Interesting report in the Telegraph that debt-laden Greece may have to turn to hedge funds for support in its next dollar bond issue.
Having effectively tried to exclude them from recent issues, a u-turn looks likely if it wants to raise anything like what it hopes, the paper says.
Such a report will no doubt be seized upon by the hedge fund lobby, who argue that hedge funds often step into markets as buyers when liquidity is scarce.
And it will be fascinating to hear any reaction from European politician Poul Nyrup Rasmussen, who in a visit to London last month accused hedge funds of raising Greece’s borrowing costs by 2.5 percent (a charge, it must be said, that was vigorously denied by the industry).
Poul Nyrup Rasmussen’s visits to London are always value for money, and today was no exception as the president of the party of European socialists launched into a tirade against banker bonuses.
“When I listen to you it’s like you’re living in another world,” he told an audience of financial executives and journalists at a Chatham House conference after a number of questions from the floor suggested EU plans for tighter regulation might be counter-productive.
For UK-based opponents of the controversial EU hedge fund directive, there are signs the draft could be overhauled.
The hedge fund industry’s anger at the EU’s Alternative Investment Fund Managers directive is hardly new now, but there are growing signs of discontent from another group — the pension funds that actually put their money into hedge funds.
Last week we reported USS (the Universitied Superannuation Scheme) and Hermes, which manages BT’s pension scheme, were criticizing the draft laws for potentially limiting their investment choice and upsetting portfolio balance.
The growing discomfort among pension funds over EU plans to regulate the hedge fund industry has prompted another public pronouncement, this time from Dutch schemes with assets of about 450 billion euros, including APG and PGGM.
We’ve noted the potential pivotal role the pension industry could play before, but as yet there hasn’t been an appreciable softening in the tone adopted by the hardliners. Their standard bearer Poul Nyrup Rasmussen called London Mayor Boris Johnson “out of touch with reality” after the much-lobbied blonde tried to strike a blow for the alternatives industry on a vist to Brussels this week.
The war of words is hotting up in the days leading up to next week’s draft EC directive on hedge funds and private equity.