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In times of uncertainly, everyone needs friends - even powerful governments and regulators. So much so that even hedge funds and private equity firms, who were not so long ago on the receiving end of criticism from public bodies, now find themselves as unlikely allies to the same organisations.

Remember the Securities and Exchange Commission, which had vowed to continue pushing for tougher regulation for hedge funds despite the courts rejecting as illegitimate rules the US financial regulator introduced requiring the registration of hedge fund managers?

Now the SEC has sided with activist hedge fund firm The Children's Investment Fund Management in its legal dispute with US railway operator CSX over the requirements on investors to disclose the stakes they hold in companies.

The railroad has sued TCI and another hedge fund, 3G Capital Partners, alleging that they illegally used equity swaps to mask their stakes in the company and evade disclosure rules. However, the SEC has rejected CSX's argument, saying it believes that a swaps stake is 'not sufficient to create beneficial ownership'.

And how about the locust call? In 2005, Franz Müntefering, then chairman of Germany's ruling Social Democratic party, accused private equity firms of behaving like 'locusts.' At that time, TPG's 50 per cent ownership of sanitary fittings manufacturer Grohe was a major focus of German criticism of private equity investment.

Today Grohe is so successful that the German government, a coalition that includes the Social Democrats, is again citing it as an example - but this time of how private equity companies can boost growth and turn companies around. In bad times, even foes can become friends - especially if they are astute.

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