28/01/2011 Author: Shannon Hawthorne

Hedge funds are not 'un-regulated', Aima affirms

The Alternative Investment Management Association (Aima), the global hedge fund trade body, has released a statement insisting that “the global hedge fund industry is not ‘un-regulated’ or lightly-regulated’.” 

The comment comes after hedge funds reacted angrily to comments made by the COO of Goldman Sachs who claimed that increased banking regulations could lead to another financial crisis by pushing risky investment activities into the hands of “less-regulated” institutions such as hedge funds. 

“My concern is that ... risk will move from the regulated, more transparent banking sector to a less regulated, more opaque sector,” COO Gary Cohn stated at the World Economic Forum in Davos, Switzerland. 

In the statement, released today, Aima emphasised the fact that hedge fund managers are “already rigorously regulated in all the main jurisdictions in which they operate, and significant new regulation is being introduced internationally”. 

“Some recent references to the ‘un-regulated’ financial sector internationally have been interpreted as referring to hedge funds,” the statement continued. “Given that it would be completely mistaken to call the global hedge fund industry ‘un-regulated’, this interpretation is presumably inaccurate.”