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Hedge fund manager withdraws from industry following overvaluation

The UK FSA has taken action to prevent a hedge fund manager from operating, alleging the overvaluation of fund assets at Regent Park Capital Management.

The FSA has obtained an undertaking from Jae Wook Oh, a former hedge fund investment manager at Regents Park Capital Management LLP (Regents Park), that he will not undertake any controlled function in relation to regulated activities for three years. Oh was Chief Executive and senior partner with overall responsibility for the firm's activities.

Regents Park is currently in liquidation and will relinquish its permission to act as a fund manager.
Regents Park is a small FSA authorised fund manager, which managed a fund domiciled outside the UK. It appears that over a number of months in 2005 there was a discrepancy between the realisable value of certain investments and those valuations provided by Regents Park.

The importance of fund valuations and the need for robust independent valuation processes was highlighted by the FSA in its recent Discussion Paper 05/4 Hedge Funds: A discussion of risk and regulatory engagement.

The FSA requires authorised fund managers to have in place appropriate systems and controls to ensure that any fund valuations are accurate. The FSA is visiting a number of firms to review this issue.

The FSA confirms that it has not commenced an investigation into Regents Park Capital Management LLP or any individuals, nor has it made any finding of misconduct or breach of the FSA's rules.

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