MFA reaches over the pond

Futures, Nov 2007 by Collins, Daniel P

The Managed Funds Association (MFA) announced in October that it has initiated a global dialogue on sound practices for the hedge funds industry.

MFA President Jack Gaine met with Sir Andrew Large, chairman of the Hedge Fund Working Group (HFWG), and Florence Lombard, CEO of the Alternative Investment Management Association (AIMA), to discuss a global approach to establishing industry best practices.

MFA first published its "Sound Practice for Hedge Fund Mangers," nearly a decade ago, and has updated them several times, most recently in 2005.

The HFWG, which is comprised by 14 mainly London based hedge fund managers, has just embarked on a similar project. HFWG published a 130-page consultation paper on best practices. The report addresses financial stability issues raised at the recent G8 forum and places particular weight on improved disclosure to investors according to a release.

"This is a significant step in that it is the first time a group of leading hedge funds have come together to give real substance as to how they will comply with FSA principals," says Large in a release.

The link between the MFA and U.K. Hedge fund associations is not a surprise as Gaine has promoted the idea that the U.S. Securities and Exchanges Commission (SEC) should adopt a more principles-based approach to regulation similar to the approach of the Financial Services Authority of London.

"MFA believes that a global approach to sound practices will provide the best path to a robust vigilance by all market participants," says Gaine in a release. Gaine says that the combination of guidance from AIMA, HDWG, MFA and forthcoming recommendations from the President's Working Group (PWG), "will provide a framework for establishing, wherever possible, uniform principals and guidance for an industry that is truly global."

The inclusion of the U.K. groups and the PWG was no accident as both have advocated a much less proscriptive approach to hedge fund regulation than the SEC.

GOLDMAN INVESTS WITH WINTON

It has been reported that a fund run by Goldman Sachs and managed by Jonathan Sorrell has taken a 10% stake in Winton Capital Management. Winton manages a diversified trend following program with approximately $9.4 billion under management according to the Barclay Trading Group's Map database. Winton's principals are David W. Harding and Martin Hunt. Harding was one of the founders of the diversified trend following AHL Program. AHL was purchased by the predecessor to Man Investments and is the anchor of its family of principal-protected alternative investment programs.