Hedge Fund Execs Don't Expect New Rules

Date: Monday, September 24, 2007
Author: Compliance reporter

A majority of executives at U.S.-based hedge fund firms do not think there will be increased regulation of the industry, new research has shown. Just 5% of partners at firms with assets worth between $100 million and $750 million and 15% of partners at firms with more than $750 million in assets said they believed there would be an increase in government regulation. Consulting firm Rothstein Kass, which conducted the research, polled 301 senior executives in June and July.

Henry Carter, chief compliance officer of San Francisco-based Global Crown Capital, said the survey results reflect attitudes in the wake of Goldstein v. SEC, the D.C. Circuit Court of Appeals ruling that overturned the hedge fund adviser registration rule. "People are feeling self-confident," he said.

"The ship has sailed for the immediate future. The government took a swing and didn't get it done," said Lane Bucklan, CCO at West Port, Conn.-based Iridian Asset Management. Bucklan said he doesn't think the government will attempt sweeping regulation anytime soon.

The survey also found that 40% of executives at firms with more than $750 million in assets think many more hedge funds will go public. Eighty-two percent said larger financial institutions will increasingly buy hedge fund companies; and around 60% of executives at larger firms said they expect hedge funds to become much more costly to operate.