Michael Tannenbaum, the new President of the US-based Hedge Fund
Association (HFA) says new and proposed US federal regulations restricting
hedge funds are ill-conceived.

Tannenbaum, a leading attorney serving the hedge fund community and co-
founder of the New York law firm Tannenbaum Helpern Syracuse and
Hirschtritt LLP, has just taken over the President's role at the HFA (see Hedge
Hunting, this issue).

He said: "Federal regulators should pull back a bit and let market forces take
over. Institutional investors already are insisting that hedge fund managers
register, provide transparency, provide better controls, provide quality custodial
arrangements and similar efforts."

Tannenbaum made these comments to financial and business journalists in
New York this week while  reviewing the current environment of increasing
regulations covering hedge funds and amid consideration of new rules
proposed by the US Securities and Exchange Commission (SEC). 

Hedge funds attracted more than USD 75 billion in assets in 2003 and provided
average returns of 19.6%, according to Chicago-based Hedge Fund Research. 
Total hedge fund industry assets stood at USD 817 billion at year-end 2003. 

Tannenbaum said: "In the current environment, hedge fund managers are at
risk of becoming a scapegoat for any number of financial scandals. This
situation is potentially damaging because hedge fund managers are
entrepreneurial, aggressive, creative and willing to take risk -- all vital elements
of healthy financial markets.  If the government imposes rules and regulations
that inhibit hedge fund growth, we may be very sorry indeed."

Background Note: Tannenbaum Helpern is a leading law firm in the global
financial services industry. Headquartered in New York, the firm has expertise
in 12 practice groups. The firm's Financial Services, Hedge Funds and
Capital Markets practice group provides legal services and advises
clients on securities law matters, futures, swaps, derivatives
regulation and assists in structuring options and customized
arrangements.  The Department structures on- and offshore registered (40
Act) funds, hedge funds and fund of fund arrangements.