Wednesday, September 23, 2009

Increasing Government Regulation is Resulting in Hedge Funds Paying Detailed Attention to Washington D.C.

Business Week reports:

This renewed focus on all things macro—from economic policy to regulatory regimes—is spurring hedge fund managers to seek the counsel of policy experts who can help them better grasp the broader context required to make investment decisions in the years ahead.

There has been a dramatic increase in requests for consultations with policy experts coming from hedge funds and private equity firms...

"A year ago, we got a real surge in such activity around the time of the [financial] meltdown in Iceland," says [Andrew Goldman, managing director of marketing, communications]. "We started pulling in the former Prime Minister of Iceland and had an enormous number of hedge funds in the U.S. who wanted to speak with him." The sharp increase in public debt in Austria and passage of the $750 billion Troubled Asset Relief Program (TARP) also prompted many requests for consultations with experts in Vienna and former Treasury Dept. officials under the Bush Administration.

One client who runs a $4 billion hedge fund in San Francisco that employs 25 researchers recently told GLG that while he never expected Washington to become "the financial capital of the world, now that it is, I have to understand" how it works, says Goldman.

The entire Business Week story is here.

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