US president-elect Barack Obama has asked Rahm Emanuel, a one-time aide in the Clinton White House, to be his chief of staff - a choice that is likely to reassure hedge fund managers, even though the Illinois congressman's relationship with the alternative industry is far from that of an unalloyed cheerleader.

Emanuel, whose career has also included investment banking with Wasserstein Perella and a board seat at Freddie Mac, was the top House recipient in the House of Representatives of campaign contributions from hedge funds, private equity firms and the wider securities and investment industry during the 2008 election cycle.

He played a part in derailing efforts last year to have carried interest taxed as income rather than capital gains, going so far as to write a memo offering several options on how essentially to preserve the tax advantage. However, he also sponsored a bill that would have prevented hedge fund managers from deferring taxes on offshore compensation.

The appointment of Emanuel suggests that Obama's presumed hostility to the hedge fund industry may have been exaggerated and that the sector will get a fair hearing as the new administration begins the process of reforming US financial sector regulation. At a time when hedge fund managers feel particularly friendless, it cannot hurt to have someone who understands their business in the heart of the White House.