Hedge Fund Regulation Accord Expected At G20 Summit

Mar 30 2009 | 1:12am ET

The world’s leaders are poised to reach accord on new rules for hedge funds and private equity firms at this week’s Group of 20 summit in London. But the alternative investment industry is already fighting back, hoping to minimize the impact of new oversight and regulatory measures.

While several aspects of a global financial overhaul have proven resistant to agreement, the G-20 is widely expected to adopt a framework for dealing with alternatives, derivatives, executive pay and excessive risk in the financial markets. At the last G-20 meeting in November, former U.S. President George W. Bush resisted efforts towards international cooperation or regulation. But the new administration under President Barack Obama has shown itself much more willing to do so, having issued its own proposals for a U.S. regulatory overhaul, including new rules covering hedge funds and p.e. firms.

For its part, the European Union plans to issue its proposals for new hedge fund regulation next month.

A working paper issued by the Canadian government on behalf of the G-20 on Friday offers some insight as to what the industry may be facing, with its call for an agreement to regulate hedge funds and other financial institutions that may pose a systemic risk to the global economic system.

But the industry is pushing back, lobbying to ensure that the new rules are not too heavy-handed. One top industry executive offered the British government a blunt warning against an oppressive regulatory regime.

“We don’t have to be in London,” Crispin Odey of Odey Asset Management told The Sunday Telegraph.

Odey was joined by other noted hedge fund chieftans, including CQS’s Michael Hintze, Lansdowne Partners’ Stuart Roden and Stanley Fink, the former Man Group CEO who now heads hedge fund International Standard Asset Management.


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