March 21, 2007
Hedge Funds Being Reviewed Again.
The problem that Hedge Funds have is that they have grown exponentially and without regulation. While estimates vary, a new survey by Institutional Investor News and HedgeFund.net released on Monday valued industry assets at $1.89 trillion in 2006, up 24 percent from 2005. A mass failure could have huge impact on the economy. Pension funds are heavily invested in hedge funds and banks have lent the money.
If there were large scale impact on pension funds, this could make the Savings and Loan failures look small.
This from, a congressional study last week:
"The perception of hedge funds as high-risk investments continues to play on the minds of US politicians, who discussed pension investments in the asset class during US congressional hearings last week.
Congressman Al Green told a congressional committee: “If pension beneficiaries lose their retirement money because of bad hedge fund investments, taxpayers could be forced to pay for the pensioners’ social security.”
Once a lot of noise is made about a sector, can regulations be far away. Recent scandals have brought hedge funds under the microscope.
If there were large scale impact on pension funds, this could make the Savings and Loan failures look small.
This from, a congressional study last week:
"The perception of hedge funds as high-risk investments continues to play on the minds of US politicians, who discussed pension investments in the asset class during US congressional hearings last week.
Congressman Al Green told a congressional committee: “If pension beneficiaries lose their retirement money because of bad hedge fund investments, taxpayers could be forced to pay for the pensioners’ social security.”
Once a lot of noise is made about a sector, can regulations be far away. Recent scandals have brought hedge funds under the microscope.
