Big Brother Bears Down

Date: Thursday, March 12, 2009
Author: Anita Raghavan, Forbes.com

Does a crackdown on one of the oldest professions spell more regulation for one of the newer ones--hedge funds?

As talk swirls over how to gain greater government oversight of banks and hedge funds, one of the world's most ancient vocations is getting squeezed by stiffer regulation.

A few weeks ago, a sign went up in London's Shepherd Market, located in the tony Mayfair area, home to many hedge funds. "Brothels are operating in this area," it reads. "The use of these premises support organized crime.'' The notice also encourages the public to contact the metropolitan police with any information.

Already sensitive to greater public scrutiny, if not scorn, some hedge fund veterans wondered if the sudden attention to streetwalkers heralded a crackdown on their trade, as well. "Mayfair is the center
of unadulterated capitalism in London with the hedge fund industry primarily based in the neighborhood,'' says Saleem Siddiqi at Tapestry Asset Management, which is located just a stone's throw from the sign.

"Today, with regulation facing the wider financial services and hedge fund industry, even one of the oldest professions of Mayfair is facing the threat of regulation.''

You won't learn much from the bobby on the block. An officer at the Mayfair & St. James Safer Neighbourhood Team says he is "not at liberty'' to comment on the sign.

Brothels have been operating for years in Shepherd Market, an area that during the lunch hour is bustling with hedge fund traders. A little after 6 p.m., though, the doors of the small townhouses in Shepherd Market are flung open--an enticement, perhaps, to get a little bite on the way home.