International hedge fund industry bodies, the Managed Funds Association and Alternative Investment Management Association, have reacted swiftly to comments by Italian Finance Minister Giul
International hedge fund industry bodies, the Managed Funds Association and Alternative Investment Management Association, have reacted swiftly to comments by Italian Finance Minister Giulio Tremonti, who during the G8 meeting in Washington said in an unscripted exchange with journalists that Italy might push for the abolition of hedge funds.
‘Hedge funds are private pools of capital that play a vital role in the global economy,’ respected MFA president and chief executive Richard H. Baker and Aima chief executive Florence Lombard in a joint statement.
‘This is a time of unprecedented instability in the markets – not a time to think about abolishing an industry that is an essential source of liquidity. In the midst of this global financial crisis, the hedge fund industry is fully engaged with regulators and policy makers to provide solutions that will benefit the markets and help to stabilise the global economy.
‘Hedge funds are entrepreneurial organisations that provide investment capital to help create new businesses and to help rebuild ailing businesses. They also provide critical risk management tools to institutional investors such as pensions and endowments and help them to meet their future funding obligations to retirees and college students. The positive returns that hedge fund managers generate for investors are more critical than ever, and any losses that occur are never linked to taxpayer dollars.
‘It is too easy to point a finger at an industry that is misunderstood. Hedge funds are not an appropriate scapegoat during a crisis that was caused by failures in the regulated banking system.’
Responding directly to Tremonti, they added: ‘The hedge fund industry in Italy is a model of successful regulation, provides excellent risk-adjusted returns for investors and is an important source for job creation. It would be a serious mistake to consider eliminating these innovative private pools of capital that are, in fact, an essential source of capital to investors, to Italy and to the global economy.’
The Managed Funds Association, whose members include hedge fund, fund of funds and managed futures fund management professionals, was established in 1991 as a source of information for policymakers and the media as well as an advocate for sound business practices and industry growth. Its headquarters are in Washington, DC, with an office in New York.
Aima has more than 1,300 corporate members in 49 countries including hedge fund managers, fund of hedge funds managers, prime brokers, providers of legal and accounting services and fund administrators.
