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Doubts over value of the hedge fund

Date: Monday, March 10, 2008
Author: Telegraph.co.uk

Almost a third of listed companies believe hedge funds have a negative impact on market valuations, new research indicates.

And companies broadly believe corporate governance regulations have questionable value in enhancing their transparency.

More than 30pc of quoted businesses polled by company law firm DLA Piper said the influence of hedge funds on overall valuations in debt and equity markets was negative.

But the funds play a key financing role, with 55pc of companies saying they helped improve access to capital.

DLA Piper head of capital markets Alex Tamlyn said the findings underlined how capital markets were "increasingly being shaped by private equity strategies and hedge funds".

Almost 170 companies were polled. Asked about corporate governance regulations, just 18pc of companies rated them as highly valuable in enhancing transparency.

DLA Piper's report says that, while most companies are satisfied with their primary listing, "the seeds are being sown for an increase in exchange shopping".