Could Carl's silence be golden?

Our favorite billionaire blogger and corporate raider Carl Icahn is safely avoiding writer's cramp. His Icahn Report, launched to much fanfare as a hub for corporate governance  and reform, has not been updated since April 16.

Reuters caught up with Icahn this week to discuss his intervention in CIT's attempted rescue. The legendary investor threw a bomb into the lender's efforts to strike a debt swap deal with its creditors, and to stay in business through a reorganization plan, by offering a $6 billion loan. Asked about the lack of production on his blog, Icahn explained he's been fully engaged this year:

"I've been sort of busy. And right now, with the market up, there's not as much interest in corporate governance like the were was a couple of months ago.  I've been so busy, with all these positions we've got. There's a lot going on."

So we checked with Damien Park, who runs activist research group Hedge Fund Solutions LLC and has his own blog tracking activist activity.  He observed that Icahn has been seeking board seats at Enzon Pharmaceuticals, Biogen, Amylin and Lions Gate.  He was actively pestering Yahoo late last year and has remained a vocal shareholder.

"He's been livelier than most of the larger activist investors this year.  That's for sure," Park said.

More interesting, perhaps, is Icahn's point that corporate governance fades as an issue when markets rebound. He announced the blog in 2007 and finally posted his first item on June 2008, as the credit crisis worsened. Perhaps his logging off  is a good signal.

  By Neil Chatterjee
    The U.S. has promised it will hunt down tax evaders.
    And it seems tax evaders are on the run.
    DBS bank, based in the growing offshore financial centre of
Singapore, told Reuters it had been approached by U.S. citizens
asking for its private banking services. But when told they would
have to sign U.S. tax declaration forms, the potential clients
disappeared.  
    Swiss banks also approached DBS on the hope they could
offload troublesome U.S. clients to a location that so far has
not been reached by the strong arms of Washington or Brussels.
    DBS said no thanks. In fact many private banks and boutique
advisors now seem to be avoiding U.S. clients.
    Will this spread to other nationalities, as governments
invest in tax spies and tax havens invest in white paint?
    Is this the end of offshore private private banking?

It seems the UK Treasury Select Committee's very public chastisement of the hedge fund industry in January has had some effect.

At the time, MPs zeroed in on the Hedge Fund Standards Board (HFSB) in particular and the relatively small number of funds it had signed up -- 33 in December -- even though these funds accounted for half of the European industry.

"You've attracted 20 fresh members in a year. If I was a trade union officer on recruitment I'd be sacked," quipped Committee member George Mudie at the time.

However, things have moved on and firms have been -- if not rushing -- at least moving slightly more speedily to sign up.

With regulation at a European and international level looming, hedge funds are increasingly aware of the need to be seen to be imposing best practice standards.

Last week the HFSB said 13 more funds, including Odey, TCI and Jupiter, had signed up.

And yesterday HFSB chairman Antonio Borges told me the body is targetting 100 funds by the end of the year.

Maybe he could apply for that trade union recruitment job after all...

Embattled Cerberus Capital Management, a private-equity firm named for the mythological three-headed dog that guards the gates of Hades, has been overwhelmed by clients seeking to withdraw money from its $2 billion hedge fund, Cerberus Partners.

Website FINAlternatives said that fund investors representing 17 percent of the assets wanted to withdraw their money in December, the most recent month for which statistics are available. Now, with Cerberus's investments in Chrysler and GMAC going bad and unemployed investors needing to tap more funds, that figure may be heading higher.

Now, according to this Bloomberg report, Cerberus sent a letter to clients warning them that it could take "years" to meet all the redemption requests, which have stacked up since the firm imposed gates in December.

“The fund’s withdrawal requests have increased substantially since the fund suspended withdrawals, partially because investors wanted to reserve their place in line and partially due to individual investors’ own liquidity needs,” according to the letter.

Like some other hedge fund firms juggling the desires of investors who want their money, with trying to avoid gutting their portfolio with forced selling, Cerberus is considering creating a special vehicle that would carve out a portion of the fund to be liquidated and distributed to investors who want out.  But it also says this would not be a quick fix. Company founder Stephen Feinberg told investors the fund “Would be managed by the general partner until it is fully liquidated, a process which might take several years.”

So should Cerberus investors lump the hedge fund in with its auto wrecks? The Cerberus Partners fund lost 16 percent in the year ended last November and fell 3 percent to $1.99 billion in the first two months of February, but at least one private equity investor tells us they are not any worse at this business than their competition. Still, investors may want to tread warily around the three-headed dog when Feinberg says the current mess has created some great new distressed debt opportunities for his firm.

Cerberus spokesman Peter Duda declined to comment for this post.

(PHOTO: A Belgian shepherd practises an attack on his trainer during the European dog show in Budapest October 3, 2008. REUTERS/Laszlo Balogh)

Giampaolo was speaking today at the London leg of the Reuters Hedge Fund and Private Equity Summit.

McLean was speaking today at London leg of the Reuters Hedge Fund and Private Equity Summit.

The once-booming hedge fund industry has shrunk rapidly over the past 9 months to roughly $1-$1.4 trillion, as investors have pulled out their cash following some pretty lacklustre returns.

However, according to Mark Kary, chief executive of Polar Capital, the industry never really deserved to have grown to the best part of $3 trillion in the first place.

He told today's Reuters Hedge Fund and Private Equity Summit in London that while hedge funds had become a "fashion item" in the good times, when it comes down to it there simply isn't enough talent to support an industry of $3 trillion.

    "This went from a $400 billion business to a $3 trillion business in the space of seven years and I just don't think there's enough talent around to be able to do that," he said.

"The idea that you can have 10,000 hedge funds all with a short book, all with a long book, all risk managing and all doing it supremely well is ... absolute nonsense. It's a skill set that only a very small number of people can execute properly."

Some managers, such as John Paulson or Hugh Hendry, have performed very well through the crisis, but they are in the minority.

For many in the industry, who set up when times were good and then rode a rising time in all markets, it seems Kary is onto something.

The timing of the Alternative Investment Management Association's hedge fund disclosure initiative indicates just how strong the winds of change are blowing in hedge fund land.

Coming just a day after ECB President Jean-Claude Trichet called the credit crisis "a loud and clear call" for extending hedge fund regulation, the move shows the hedge fund industry feels it must be more active in deciding the future shape of regulation.

The move, which will include regular -- probably quarterly -- disclosure of systemically significant holdings and risk exposure to national regulators, goes further than that suggested at last month's Treasury Select Committee by Marshall Wace chairman and Hedge Fund Standards Board trustee Paul Marshall, who had proposed aggregating data through prime brokers.

"The international agenda is starting to gallop away... We can see which way the wind is blowing and we want to exercise leadership," said AIMA CEO Andrew Baker, adding the proposals had been in the pipeline since early in the new year.

But AIMA's drive to do this also serves to highlight the low number of funds that have signed up to the HFSB's voluntary code -- a fact seized upon by last month's Treasury Select Committee.

AIMA is proposing unifying all the industry standards -- AIMA, the HFSB, IOSCO, PWG and MFA -- into one code. Their fear is that regulators may do this for them.