Elana Margulies

14/12/2011 Author: Elana Margulies

Hedge funds must reach out as election looms

Global legislation impacting hedge funds, such as the Dodd-Frank Act and the AIFM Directive, has made the respective world financial centres of New York and London less competitive and should be given a second look as America gears up for the 2012 US presidential election, according to former US congressman Mark Kennedy (Republican-Minnesota).
In a conversation with HFMWeek, the former member of the US House of Representatives, who served on the Financial Services Committee from 2003 to 2007, said those respective financial centres in the US and Europe should emphasise healthy competitiveness, arguing it stimulates the economy by creating jobs.

“When I look at regulations of hedge funds, the thing that is on the top of my mind is that capital goes where it feels welcome,” he said. “If a government makes hedge funds and other financial players feel less welcome, they will go elsewhere. I’m not sure if that is thought about enough in either London or New York or Washington.”

Kennedy, who teaches, speaks and advises worldwide on business in a political age, said with the presidential election looming, hedge fund managers have an obligation to help politicians better understand the benefits of their industry.

“It is too easy for others to classify what they don’t understand as bad and something that needs to be regulated,” he said. “The hedge fund industry needs to do a better job being proactive, engaging external forces as opposed to waiting until they are being regulated. They need to be doing a better job of aligning their activities with society.” 

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