Update: Slow Start for EU Hedge Fund Best Practices
Antonio Borges, a former Goldman Sachs vice chairman and current chairman of the European Corporate Governance Institute, has been named the chairman of the Hedge Fund Standards Board (formerly the Hedge Fund Working Group). Mr. Borges will now play the role of persuader, attempting to get a significant number of hedge fund groups ”sign on” to the Standards.
Let’s see if Mr. Borges can help this slow start gain a bit more traction, and help dampen the implied threat of additional regulation that is hanging over the industry in Europe.
(As a footnote regarding the US’s President’s Working Group draft report that was recently released — those standards do not require an affirmative “sign on”, as the European ones do. This difference may prove critical as both these initiatives move forward.)
[original post] For an industry that has cried out for “self-regulation”, and investors who have cried out for “increased transparency”, it is hard to fathom how it is that no EU hedge funds (that’s none, as in zero) have actually signed on to comply with the best practices enumerated in the UK Hedge Fund Working Group Standards report published some five months ago. Actually, that is a slight exaggeration — the 14 original working group funds have signed on — but that is the extent of participation.
We see the self-regulatory movement having a tough time in Europe, and now we can only wonder what will occur here in the US once the President’s Working Group best practices guidelines are finalized. Will the participation rate (or lack thereof) be the same? And if so, what will be the reaction of regulators?
We continue to hear the drumbeat call for additional regulation in EU countries — will the echo reverberate to the US?