finance sophistry (4.10.05 update 4.11.08)

Private, national & common wealth in the post-socialism/capitalism era
Bewildered by what's been happening, both nationally and globally, in the wake of the fall of the Berlin Wall?
I.e. where the unwittingly weakened nation-state - formerly a bulwark against plain-levelling & globalization -
no longer tempers the social, economic & other pitfalls foreseen by Marx, Gramsci, Minsky, McCulley,etc.
Where - as the Laffer & Rider Curves illustrate in the tax & the social fields - excessive poor/rich gradients
upset the social fabric, wash away fertility factors with uncontrolled erosive powers & contribute to famine.
Where indeed, as Patrick Martin pointed out, monopolistic capitalism and the associated reckless greed
are no longer kept in check by Adam Smith' invisible hand, i.e. by the balance of contradictory interests.
And where the capacity for self-correction is increasingly inhibited by loss of freedom, mooring & orientation
which led to market frenzies & false alpha birds feeding on hype & bubbles, reminiscent of the Roaring 20s.
IMF & FATF estimate black funds (drugs, tax evasion etc) to be 2-5% of world's GDP (2006: $960-2400bn).
An IMF Report indicates these funds to be increasingly chased under anti-terrorism & ever flimsier pretexts.
Courtesy by the IV Reich's Secret Service, the world has indeed been made hostage of ill-considered rules
which impede more legitimate business than crime. For big time money laundering, the US Treasury set the
standard in 2001 with its 31% confiscatory backup withholding tax on unidentified investors in US securities,
turning foreign bankers from trustees of clients into IRS agents (qualified intermediaries) subject to US laws.
Private equity & hedge funds thus found a government-sponsored access to black funds, while the latters'
entry into subprime markets was also eased by the Internet. Results: predatory lending & systemic risks.
Society's organization needs re-thinking with Plato, G.Duttweiler, M,Yunus, J.M.Arizmendiarrieta etc.
For man's evolution may only be stressed by technological leaps but not accelerated beyond natural limits.
Also: return on investment rates above productivity gains & organic growth are predatory & not sustainable.
If driven by managers, lawyers & funds on the back of other stakeholders, M&As are thus Ponzi schemes
where shareholder value adepts can maraud with stacked Monopoly cards, helped by micro-economic laws.
Like compulsory social insurance systems whose doom is delayed or obscured only by inflation, war, etc.
And where the cunniest operators are state-supported by myopic magistrates hood-winked into fiscal deals.
Gary J. Aguirre's US Senate testimony details fraud & market mechanics which were at work before 1929,
e.g. Ponzi structures, unregulated pools of money, siphoning from unsuspecting mutual fund investors, and
abuse-prone market dominance: hedge funds' $1.5 trillion drive half of the $28 trillion NYSE's daily trading.
Tongue-in-cheek, Warren Buffet famously opined: "derivatives are financial weapons of mass destruction";
yet, under increasing performance & compliance pressures, some bankers still see a future in fee hunting.
Society wised up against churning of accounts by undelicate trustees, but not yet against macro-parasitism
which feasts on ignorance, sucks & devours a firm's life-preserving substance, & weakens society's pillars.
Which turns economic rat races into societal tailspins with early burn-outs & senior citizens being wasted,
& instills values causing youth to be educated out of sync, resulting in drug, violence & €1000 generations.
With profit-driven quarterly thinking & cost-cuttings also eroding due infrastructure maintenance & renewal,
& democracy's promises ridiculed by Fatf, EU & UN bureaucratic lawmaking as if Berlin Wall fell eastwards.
So why not thinking things over & “Revisiting Das Kapital while some dance on the Titanic”? Iconoclast

Spätestens nach der Zulassung in Deutschland erscheinen sie immer öfter in der Presse und in schönen Werbebrochuren. Für die einen sind sie der „Ausbund des Bösen” schlechthin und für alle sonst unerklärlichen Kursverluste verantwortlich. Für die anderen sind sie wahre „Performancekünstler”, die selbst in fallenden Märkten beachtliche Kursgewinne erzielen können sollen.
Selbst große Krisen haben sie schon ausgelöst. Bei den Liquiditätsproblemen des Long Term Capital Management- oder LTCM-Fonds mußte sogar die amerikanische Notenbank moderierend eingreifen, um starke Verwerfungen an den Finanzmärkten zu vermeiden. Als „Sündenböcke” waren selbst prominente Nobelpreisträger beteiligt.

Fonds verfolgen völlig unterschiedlich Stile ...
Unvergessen sind auch die großen Währungsspekulationen des George Soros. Er soll unter anderem mit dafür verantwortlich sein, daß das britische Pfund vor Jahren aus dem europäischen Währungsverbund kippte. Unter anderem deswegen ist die Währung der Briten heute nicht Bestandteil des Euro-Währungsraums. Oder die starken Schimpfworte, mit denen ihn damals Malaysias Ministerpräsidenten Mahthir Bin Mohamad bedachte. Denn der machte Soros für die starke Abwertung des Ringgit verantwortlich, obwohl die Bank Negara, also Malaysia's Zentralbank, damals extrem mitspekulierte.
Aber das sind nur die Extreme. Dabei verfolgen Hedge Fonds recht unterschiedliche Strategien, manchmal sogar auf bewährte „handwerkliche” Art. Sie lassen sich selten über einen Kamm scheren. In einer Serie wirft FAZ.NET einen Blick auf die Szene.

... und Strategien
Im ersten Teil unter der Headline „Hedge Fonds: alles andere als homogen” wird versucht, den Bereich grob zu klassifizieren. Danach werden verschiedene Anlagestrategien an konkreten Beispielen erläutert. Unter der Überschrift Arbitrage ist kaum vom Markt abhängig beispielsweise die so genannte „Relative -Value-Strategie”. Zwei weitere Beiträge zeigen Beispiele für ereignisorientierte - Link: Von Ereignissen profitieren - und so genannte opportunistische Strategien - Link: Mit "Opportunismus" zur Überrendite.
Diese „Basisstücke” werden im weiteren Verlauf ergänzt werden durch Beiträge über Hedge Fonds-Indizes (Hedge-Fonds-Indizes haben oft noch Schwachstellen), Dachfonds und Hedge Fonds-Zertifikate.

25. Juni 2002 Hatten Hedge Fonds lange Zeit im Verborgenen geblüht und waren nur dann und wann bei Krisen in den Brennpunkt geraten, so entwickelte sich in den vergangenen Monaten eine neue Form des Umgangs mit diesen „sagenumwobenen” Anlagevehikeln. Immer öfter erscheinen sie in der Presse. Für die einen sind sie der „Ausbund des Bösen” schlechthin und für alle sonst unerklärlichen Kursverluste verantwortlich. Für die anderen sind sie wahre „Performancekünstler”, die selbst in fallenden Märkten beachtliche Kursgewinne erzielen können sollen.
Manche betrachten sie als den Ausdruck einer neuen Investitionsblase, andere für ein neues Paradigma der Vermögensverwaltung. Grund genug, sich einmal mit den verschiedenen Anlagestrategien zu beschäftigen. Denn die sind alles andere als einheitlich. Im Gegenteil.

Hedge Fonds mit breitem Risiko-Ertrags-Spektrum
    Als „alte Hasen” sind viele Aktienanleger etwa mit der Wahl verschiedenen Branchen zu verschiedenen Zeitpunkten oder mit unterschiedlichen Anlagestilen vertraut. Sie wissen in der Regel, dass die unmittelbar verbunden sind, mit unterschiedlichen Erwartungen an den möglichen Ertrag und das damit verbundene Risiko. Wer beispielsweise in Technologiewerte investiert, erwartet einen relativ hohen Ertrag. Er muss aber bereit sein, ein entsprechend hohes Risiko einzugehen. Für den Anleger am Rentenmarkt dürfte genau das Gegenteil der Fall sein.
     Und genau dasselbe gilt für Hedge Fonds auch. Sie unterliegen allerdings keinerlei Anlagerestriktionen und nutzen im Unterschied zu privaten Anlegern und zu vielen institutionellen Anlegern weit mehr Anlageinstrumente. Sie kaufen nicht einfach nur Aktien oder Anleihen, sondern sie setzen teilweise Strategien um, die sie anhand von komplexen mathematisch-statistischen Modellen ausgetüftelt haben. Nicht selten nutzen sie dabei auch derivative Instrumente und Kredite.
     So ist es wenig verwunderlich, dass das Resultat ein ganz anderes Spektrum aufweist, als die einfache Performance eines „Normalanlegers”. Steigt eine normale Aktie mit einem Beta von eins um zwei Prozent, wenn der Markt zwei Prozent zulegt, so kann ein Hedge Fonds gleichzeitig je nach Stil um ein Mehrfaches steigen oder fallen.

Kategorisierung nach „Marktrisiko”
    Die Strategie eines Hedge Fonds hängt in der Regel von den Interessen und Fähigkeiten des Managers oder des Management-Teams ab. Sie ist damit mit herkömmlichen Maßstäben kaum vergleichbar. Aus diesem Grund wird als Kriterium oft die Korrelation mit dem Markt herangezogen. Und selbst dann, gibt es immer wieder Überschneidung. Etwa wenn die Manager in unterschiedlichen Marktphasen unterschiedliche Stile „fahren”.
     Grundsätzlich wird jedoch unterschieden zwischen Strategien mit geringem und hohem Marktrisiko und allen Zwischenstufen. Niedriges Marktrisiko weisen beispielsweise die Relative-Value- oder auch Arbitragestrategien auf. Spekuliert ein Fonds etwa auf Einheitsaktien und kauft Rheinmetall-Vorzüge für 11,65 Euro und verkauft die Stämme für 18,80 Euro, so ist es egal, was der Markt macht. Denn die beiden Aktien werden sich immer in etwa parallel bewegen. Was die eine Position verliert, gewinnt die andere.
    Werden allerdings die Aktiengattungen zusammengelegt, so könnte die bisherige Differenz als Gewinn abfallen.
     Das andere Extrem sind die so genannten opportunistischen oder direktionalen Fonds. Sie setzen bewusst auf Trends und nehmen nicht nur volles Marktrisiko, sondern erhöhen das zusätzlich mit geborgtem Geld und dem Einsatz von Futures und Optionen. Diese Strategie verspricht zwar überproportionalen Erfolg - aber nur dann, wenn sie auch aufgeht. Ansonsten kann es teuer werden. Die entscheidende Fähigkeit des Managers dürfte damit darin bestehen, geeignete Gelegenheiten zu finden und die Risiken schnell und konsequent zu beschneiden, wenn er schief liegt.

Leerverkäufe schaffen Liquidität
Weitgehend einig ist man sich in der Forderung, dass Hedge-Funds Leerverkäufe offen legen. Eine Meldepflicht dürfte aber vor allem bürokratischen Leerlauf zur Folge haben. Bei Leerverkäufen leiht ein Hedge-Fund zum Beispiel Aktien von einem Publikumsfonds aus und verkauft sie in der Überzeugung, dass die Firma «überbewertet» sei. Trifft, diese Vermutung zu, kann er die Aktie zu einem späteren Zeitpunkt günstig erwerben und an den Fonds zurückgeben. Die Differenz zwischen Verkaufserlös und Kaufpreis, abzüglich einer Gebühr für den Ausleiher, streicht der Hedge-Fund als Gewinn ein. Leerverkäufe führen somit zu einem regeren Handel und sorgen an den Wertpapiermärkten für zusätzliche Liquidität, womit sich die Gefahr erratischer Preisbewegungen verringert.
Manager von Konzernen, deren Firmen ins Visier von Hedge-Funds geraten sind, sind oft die eifrigsten Verfechter einer stärkeren Regulierung. Vor Jahresfrist hatten Hedge-Funds mit Leerverkäufen darauf spekuliert, dass der Touristikkonzem TUI aus dem Index der deutschen Standardwerte DAX fallen werde. Dabei waren die Leerverkäufe jedoch nicht die Ursache für die Krise bei TUI, sondern allenfalls ein Begleitsymptom. Der schon zuvor gesunkene Aktienkurs war Ausdruck von Skepsis gegenüber der Firmenstrategie. Seit Ferienreisende Flug und Unterkunft unabhängig voneinander über das Internet buchen können, ist das Konzept des integrierten Reiseveranstalters, der die ganze Palette anbietet, umstritten. Der Fall TUI veranschaulicht ausserdem, dass Hedge-Funds über Leerverkäufe den Kurs einer Firma nicht beliebig beeinflussen können, wie ihnen oft unterstellt wird. So war es mit der Spekulation à la Baisse schnell vorbei, als TUI Semesterzahlen präsentierte, die besser waren als erwartet. Kritiker von Leerverkäufen vergessen zudem, dass Hedge-Funds die geliehenen Papiere auch stets wieder zurückkaufen müssen, womit es früher oder später automatisch zu einer gewissen Kursstabilisierung kommt.

Gute contra böse Investoren
Auch der Aufsichtsratspräsident der Deutschen Börse, Rolf Breuer, wetterte gegen Hedge-Funds. Dabei spielte er die kurzfristig orientierten, «bösen Spekulanten» gegen die «guten, stabilitätsorientierten Investoren» aus - eine gefährliche Vereinfachung. Oft sind es gerade die kurzfristig orientierten Hedge-Funds, die neue Informationen besonders schnell in den Markt tragen. Damit nimmt insgesamt die Gefahr von Fehleinschätzungen ab. Für die Stabilität der Finanzmärkte wäre es demnach kontraproduktiv, würde etwa das Aktienstimmrecht von Hedge-Funds eingeschränkt, wie das gewissen Politikern vorschwebt. Die Vorkommnisse bei der Deutschen Börse illustrieren zudem, wie willkürlich die Unterscheidung zwischen, kurzfristigen und langfristigen Investoren ist. So haben die vermeintlich stabilitätsorientierten deutschen Fonds und Banken ihre Anteile schnell verkauft, nachdem die Hedge-Funds eingestiegen waren, und der Kurs neue Höhen erklommen hatte.
Die Attraktivität von Hedge-Funds haben mittlerweile auch Versicherer und Pensionskassen entdeckt. Hedge-Funds haben in der jüngeren Vergangenheit Renditen erwirtschaftet, die relativ unabhängig vom Marktgeschehen waren. Besonders erfolgreich agierten sie in den Jahren 2001 und 2002, als die Aktienmärkte deutliche Einbussen verzeichnet hatten. Das verstärkte Interesse institutioneller Anleger hat bereits die Transparenz m der Branche erhöht. Versicherer und Pensiohskassen müssen detaillierte Informationen über die eingegangenen Risiken einholen. Das folgt von den gesetzlichen Anforderungen her, aber auch aus Eigeninteresse, müssen sie doch jederzeit in der Lage sein, die Zahlungsverpflichtungen gegenüber ihren Versicherten zu erfüllen.

Der Hebel ist gesunken
Das Risikomanagement verbessert haben auch die Banken, die als «prime broker» mit den Hedge-Funds Geschäfte machen. Dabei übernehmen sie etwa die Abwicklung der Transaktionen, die Depotverwaltung, oder stellen Fremdkapital zur Verfügung. Bei der Risikoeinschätzung, achten die Banken vor allem auf die Hebelwirkung. Darunter wird einerseits verstanden, wie stark sich Hedge-Funds in Derivaten, wie Aktienoptionen engagieren, welche die Chancen, aber auch die Risiken von Kursänderungen potenzieren. Anderseits arbeiten Hedge-Funds oft mit viel Fremdkapital. Dies erlaubt es ihnen, die Eigenkapitalrendite stark zu steigern, solange, die Zinsen für; das Fremdkapital unter der Rendite der Investition liegen. Tritt allerdings das Gegenteil ein, können Verluste entstehen, die das Eigenkapital rasch aufzehren. In diesem Fall droht die Insolvenz. Zu den Vorsichtsmassnahmen zählt deshalb auch, dass Banken Kredite an Hedge-Funds nur noch auf besicherter Basis vergeben, wie die Deutsche Bundesbank schreibt.

Dass die Vorsicht der Banken und der Hedge-Funds zugenommen hat, darauf deutet auch eine Untersuchung der Bank für internationalen Zahlungsausgleich (BIZ). Die BIZ-Ökonomen haben die gesamte Hebelwirkung, also diejenige über das Fremdkapital und diejenige über den Einsatz von Derivaten, geschätzt. Die Datenbasis umfasst 25% bis 30% aller Hedge-Funds. Die Resultate zeigen, dass die Hebelwirkung 1997 und 1998 besonders hoch war. Das Gesamtportfolio hatte damals fast den zehnfachen Wert des Eigenkapitals der Hedge-Funds. 1998 war auch das Jahr, als der Hedge-Fund LTCM ins Trudeln geriet, was allein bei der UBS zu einem Abschreiber von l Mrd. Fr. führte. Die Leverage ist seither aber markant gesunken und erreichte Ende 2003 noch einen Wert von gut 3 (vgl. Grafik).

Kaum Hedge-Funds «made in Germany»
Das Engagement institutioneller Anleger und das gewieftere Risikomanagement der Banken haben somit bereits zu einer stärkeren Überwachung der Branche durch den Markt geführt. Banken, Versicherungen und Pensionskassen haben alles Interesse daran, Unbill von ihren Bilanzen fernzuhalten. Wer Hedge-Funds per Gesetz stärker an die Kandare nehmen will, läuft Gefahr, diese privaten Arrangements zu verdrängen. Auch die Hedge-Funds selbst haben seit den neunziger Jahren hinzugelernt und gehen mit Risiken heute sorgfältiger um. Gerade das Beispiel Deutschland zeigt zudem, dass ein enges Korsett, die Gründung von Hedge-Funds abwürgt. Seit Anfang 2004 können in Deutschland Hedge-Funds zwar aufgelegt werden. Da sie ihre Investitionen und die damit erzielten Erträge aber vollständig offen, legen müssen, sind Hedge-Funds «made in Germany», eine äusserst rare Spezies geblieben. Dagegen sind die Aktivitäten, von im Ausland domizilierten Hedge-Funds am deutschen Markt bisher noch, nicht mit lähmenden Regulierurigen überzogen worden. Schon aus Gründen der Fmanzmarkt-Hygiene sollten die Freiräume der Hedge-Funds auch künftig nicht eingeengt werden.

    FORGET the leadership squabbles at the Labour and Conservative party conferences. The best story in the British press this weekend was of a deal-happy hedge-fund manager who spent £36,000 ($64,000) in a London bar in a single evening, including a £3,000 tip for the bemused waitress. It’s not the amount spent that leaves people amazed, eye-catching though it was. It’s that he was apparently so nice.
    What is it about hedge funds? If lawyers hadn’t already taken all the worst jokes, hedge-fund folk would certainly be contenders. The high-paid managers of these lightly regulated investment pools are blamed for everything from the high price of oil to the crumbling of corporate governance. Yet they are looking anything but omnipotent these days, as rumbling scandals combine with so-so performance to turn many traditional investors off hedge funds before newer institutional fans are firmly committed to them.
    The long-running financial soap opera that is Bayou Funds finally hit peak ratings last week, as the group's founder and finance director pleaded guilty in a New York court to persistently cooking the books. Investors are still whistling for most of the $300m-plus they put in. Though the Bayou case is the biggest hedge-fund investigation to come before the Securities and Exchange Commission (SEC) in five years, it was never more than a years-long fraud perpetrated by a well-connected Louisiana wide-boy. It matters to the world at large mainly because various experts who should have known better (J.P.Morgan, for example, whose Spinnaker Fund was invested in Bayou) apparently did not.
    Potentially more worrying, though no wrongdoing has been proven, are allegations about two other fund groups, Man Group and Gamco Investors, for these sit at the heart of the fund-management establishment. Man Group is tussling with the receiver of a collapsed hedge-fund firm, Philadelphia Alternative Asset Management Company (PAAM). The receiver alleges in a contempt motion filed last week that Man was not helpful in shedding light on the activities of a senior employee at its futures brokerage, Man Financial, who might have helped PAAM to hide some $175m in losses. Man says it has been co-operating with inquiries.
    As for Gamco Investors, the man who masterminds the publicly quoted fund-management group, Mario Gabelli, is being sued by two of his original backers who own stakes in the private company that controls Gamco. Unhappy because they have not ended up with marketable shares in a public company whose share price has trebled since 1999, they allege that Mr Gabelli and the private firm’s other directors are “guilty of looting the assets of the company, breaching their fiduciary duties to its shareholders and oppressing its minority shareholders”. Mr Gabelli says that they have treated everyone fairly. As far as the suit is concerned, he says: “The dogs bark and the caravan moves on.”
    But these brouhahas in the heart of hedgeland are the least of its problems. In a universe of perhaps 8,000 funds, it is not unusual to find a handful of bad apples and another, bigger bunch whose procedures are not all they should be. More worryingly and more generally, growth is slowing sharply. In Europe, hedge-fund assets increased by only 9% in the six months to June 2005 (to $279 billion), according to EuroHedge, a trade publication, after growing by about 50% in all of 2004. In America, according to a related publication, Absolute Return, the hedge funds with more than $1 billion in assets under management also grew by only 9% in the first half of this year.
    That is neither surprising nor necessarily a bad thing. Hedge-fund assets have doubled in little more than four years and a lot of over-eager new players have come into the market. But lately performance has been poor. Hedge-fund returns, net of fees, were 4.2% in the year to August, according to CSFB/Tremont’s measure—less than brilliant compared not only with what they were in the 1990s but with total returns on European shares (though returns on the stagnant S&P 500 were even worse).
    What seems to be happening in Europe, anyway, is that the rich private clients who for years have been practically coterminous with hedge funds are losing enthusiasm for the genre. Man, for one, reports that its private clients redeemed more than they invested in the three months to September. GAM, which runs funds of hedge funds, saw net redemptions in the quarter to June.
    Meanwhile, the investing institutions that were expected to come rushing in for higher yields have yet to do so in bulk. New research from Greenwich Associates, a research firm, shows that, despite all the talk, pension funds’ allocation to hedge funds has stayed flat. The proportion of European institutions that say they are planning to start using hedge funds has dropped from 19% in 2004 to 8% this year.
    More may be at work here than undistinguished returns. After all, protection of capital in bad markets and good—not stratospheric returns—is a large part of what hedge funds are supposed to be about. They are prized for adding stability to portfolios, for being uncorrelated with mainstream markets and for minimising risk through diversification. There are increasing doubts these days as to how much most hedge funds are really doing that—about whether, in short, hedge funds are hedging.
    Hedge funds are now big enough and intertwined enough with banks to be a new source of risk to the financial system as a whole. Several relatively recent studies* reach disturbing conclusions. The first is that hedge funds overall—even those that define themselves as “market-neutral”—are more correlated with equity markets than used to be thought, and that different strategies are also more correlated with each other than they look. So much for diversification. Another conclusion is that because many hedge-fund investments are relatively illiquid, the way in which they are periodically priced tends to “smooth” returns and hence make funds appear less risky than they are. So much for fancy risk-reward measures such as Sharpe ratios.
    A final conclusion is that hedge funds are now big enough and intertwined enough with banks to be a new source of risk to the financial system as a whole.
    The New York Federal Reserve would undoubtedly agree, though perhaps for different reasons. In the Fed’s attempt to eliminate a huge back-office backlog in the fast-growing credit-derivatives market, hedge funds have emerged as even badder boys than the investment banks that deal with them. While trades are unconfirmed, or if one party (usually hedge fund) unilaterally assigns a trade to a third party, it is unclear what risks lie where. The banks are expected to present a recovery plan to the Fed this week requiring hedge-fund customers to adopt standardised trading procedures and to settle trades electronically through the Depository Trust and Clearing Corporation.
    As investors and supervisors are beginning to ask tougher questions, a little more transparency is about to hit this famously murky corner of the financial world. Just as mutual funds, the investment growth story of the 1980s, were eventually forced to divulge more information, hedge funds will be too. The old argument for exempting them from disclosure—that they dealt only with knowledgeable investors—holds less and less true, as more middle-income investors buy their way in through funds of funds and the like, and ordinary workers’ pension funds commit their future wellbeing to hedge funds. Nor is what most hedge-fund managers do beyond the wit of man to comprehend: equity long/short strategies are the biggest investment style these days.
    Most hedge-fund investment advisers will be required to register with the SEC by next February, though they will not be reporting anything like the information that mutual funds provide. The most useful sort of disclosure will emerge from the market itself: Morningstar and Lipper are among those interested in rating individual hedge funds, though the difficulties are considerable. One wonders how they will rate the fund that Richard Breeden, former head of the SEC itself, is rumoured to be starting.

* “Do Hedge Funds Hedge?”, by Clifford Asness, Robert Krail and John Liew, Social Science Research Network; “Hedge Funds: Risk and Return”, by Burton Malkiel and Atanu Saha, Princeton University; “Systemic Risk and Hedge Funds”, by Nicholas Chan, Mila Getmansky, Shane Haas and Andrew Lo, National Bureau of Economic Research.

Moins visible que la crise d'avril dernier, le choc d'octobre a causé son lot de ravages dans l'univers déjà ébranlé de la gestion alternative. Survenant après trois mois de hausse, le plongeon ai cette fois, affecté de nombreuses stratégies alors qu'au printemps une seule d'entre elles avait subi de gros revers. De très nombreux gérants se sont retrouvés avec des stratégies à rebrousse-poil par rapport à l'évolution des monnaies, des taux et des indices d'actions alors que leur métier consiste justement à jouer les imperfections des marchés. Les chiffres tombent, dévastateurs. Les performances pour octobre sont parmi les pires qu'a connus cette industrie. «Certains disent même que ce sont les pires depuis 2000», rapporte Louis Zanolin, de Harcourt à Genève. Les indices de HFR sont, à cet égard, impitoyables: l'entier de l'industrie a plongé de 1,85% durant le seul mois d'octobre. Si toutes les grandes catégories de stratégies n'ont pas fait aussi mal, la moins mauvaise a quand même baissé de 1,45%: ce sont les equal weighted stratégies (comprenant toutes les stratégies, mais selon une répartition fixe, sans tenir compte des volatilités) alors que le fond est atteint par les approches dites market directional (qui misent sur les mouvement de marché), avec-2,78%.

Le ciseau a tendu son piège
    Les indices, on le sait, n'ont qu'une valeur indicative tant leur environnement sous-jacent est mouvant et opaque. L'analyse de Standard & Poor's est à cet égard éclairante: l'indice général a limité la casse à -0,47% durant le mois inaudit, mais toutes les stra-tégies ou presque y ont laissé des plumes. La seule à tirer ses marrons du feu est celle de convertible arbitrage (qui prend des positions longues sur les obligations en shortant les actions de la même société), qui avait été au centre de la crise d'avril.
     La tendance de fond esquissée par les indices trouve une explication claire pour les spécialistes. Louis Zanolin: «Tout le inonde pariait sur une poursuite de la baisse du dollar et de la hausse des prix du pétrole. Or, la hausse des taux d'intérêt a pris de court les stratégies basées sur les produits à revenu fixe. Simultanément, les prix de l'énergie se sont orientés à la baisse. En outre, ils auraient dû entraîner une hausse des indices des actions. Or, c'est le contraire qui s'est produit, prenant au piège à la fois les gérants engagés dans les matières premières et ceux qui font du long/short equity. Ceux qui ont payé le prix le plus élevé sont les gérants engagés dans des positions longues.»
    «En octobre, tous ceux qui avaient des positions longues ont subi des pertes. Pourtant, il pa-raissait clair à la fin de l'été que de nombreux titres étaient surévalués et qu'il fallait les shorter. C'est ce que nous avons fait et nous avons enregistré une perfor mance positive, non sans perdre un peu sur les positions longues», témoigne Juan Sartori, l'un des responsables de la société de ges-tion de hedge fuiid Sagio à Genève.

La surprise s'est invitée toute seule
En fait, les gérants ont été pris au piège d'une volatilité plus élevée que prévu. Celle-ci a principalement pris au piège ceux qui étaient engagés dans des positions longues et ne pouvaient les dénouer sans enregistrer des pertes substantielles sur leurs porte-feuilles. «Pourtant, les gérants auraient dû anticiper le fait que la volatilité est plus élevée en octobre par un facteur quasiment saisonnier», relève Florence Duculot, d'EIM à Nyon. Il est vrai que la situation dans laquelle ils se sont trouvés, pris en tenaille entre un dollar haussier et un marché d'actions baissier, était inattendue.
Mais n'est-ce pas le propre de la gestion alternative que déjouer des anticipations des autres acteurs du marché? Assurément, mais cette règle n'a, semble-t-il, pas été appliquée dans toute sa noblesse. «La tendance, cette année a été d'être plus "long" et plus régressif que d'habitude. C'était notamment le cas en août, où les fonds ont bien performé grâce à cette tactique», poursuit la spécialiste d'EEVL Toute la question est alors de savoir quand sortir pour éviter le plongeon. C'est à cette question que les gérants n'ont pas su répondre adéquatement. «Ils ont été pris au piège de la volatilité, avance Juan Sartori. Leurs clients leurs demandent de contrôler celle-ci. Ds savent très bien y parvenir, mais c'est au détriment du risque. A croire que, nourris de cette expérience, la clientèle exigera désormais des prises de risques plus importantes en matière de tactiques et que cela débouchera sur un boom sur les placements hautement volatils.»
-> [y.genier@agefi.com]

Même si les performances des fonds fermés restent encore confortablement positives sur l'ensemble de l'année, le choc d'octobre sonne comme un avertissement supplémentaire contre une industrie encore très peu soumise à l'œil scrutateur des autorités réglementaires les plus importantes, la SEC aux Etats-Unis et la FSA au Royaume-Uni. Aux Etats-Unis, où, sur 8000 gérants de hedge funds, il s'en trouve bien 5000 qui ne sont pas enregistrés, la SEC a décidé de scruter la situation des plus grandes entités. Dans sa ligne de mire figure une pratique en voie de généralisation, à savoir le rallongement de la période de lock-up, la période durant laquelle un client ne peut pas sortir d'argent du fonds dans lequel il est investi. Il est vrai que la législation actuelle limite la surveillance dont le lock-up est limité à douze mois sans considérer la possibi-lité offerte par certains fonds de réinvestir directement les gains dans le fonds.

L'œil de Londres se fait insistant
A Londres, la FSA n'est pas aussi avancée dans ses tentatives de contrôle. Elle vient juste de faire savoir qu'elle avait placé 35 des plus grosses sociétés spécialisées sous surveillance constante. Cette démarche s'inscrit cependant dans un effort de compréhension de cette industrie, ainsi qu'elle l'a souligné. Mais ses intentions s'éclairassent du fait qu'elle a mis sur pied, depuis juin, une équipe de surveillance ad hoc, dans la suite de la crise d'avril, ouvrant la voie à une réglementation plus stricte pour ce secteur. Ce dernier s'est évidemment prononcé pour le maintien de la situation actuelle, privilégiant des relations régulières avec un chargé d'affaires du régulateur britannique. Le besoin d'instituer des contrôles plus stricts n'est cependant pas totalement contesté par cette industrie. Les grands fonds, les mieux établis, ne voient pas sans inquiétude le bourgeonnement d'une multitude de nouvelles structures à la vie parfois fort brève. «On ne peut pas continuer avec cette anarchie!» estime un gérant genevois. Il est vrai que le durcissement des conditions de marché rend plus difficile l'accès à la poule aux œufs d'or que constitue un fonds bien géré, avec un risque d'image conséquent pour l'ensemble de l'industrie.

    Forte de plus de 8000 fonds gérant en tout quelque mille milliards de dollars, l'industrie des hedge funds est clairement sortie de l'ère du bricolage de garage pour s'établir confortablement dans celle du big business. Malheureusement pour elle, avec le confort sont rapidement venues les mauvaises habitudes et celles-ci ont pris nombre d'acteurs à leurs pièges.
    La multiplication des joueurs ne s'est pas faite en faveur d'une élévation de la qualité de ces derniers, bien au contraire. L'espérance de vie d'un nouveau fond ne dépasse une année que dans un cas sur deux, ce qui en illustre la précarité. Celle-ci incite de nombreux autres à faire profil bas pour tenter d'attirer une clientèle toujours plus large, toujours plus institutionnelle, au détriment de la prise de risque. C'est ainsi que de trop nombreux fonds se sont soudainement pris à rebrousse-poil de leur propre stratégie alors que, justement, ils auraient dû être les premiers à jouer les inefficiences de marché qui sont apparues en octobre.
    Si ce sont les stratégies long/short qui ont payé le prix le plus élevé, c'est que trop de gérants étaient «long» et pas assez «short», avec l'objectif de profiter de manière pépère de la hausse des indices de l'été sans se préparer au grand retournement du début de l'automne. Ce sont donc les gérants qui ont voulu trop minimiser leurs risques qui se sont exposés le plus, créant ce paradoxe propre à l'industrie de la gestion alternative: moins on s'expose, plus on s'expose à se faire prendre au même piège que les gérants traditionnels. Avec, en plus, les effets de leviers propres à cette activité qui peuvent prendre des proportions absolument dévastatrices lorsqu'ils ne sont pas maîtrisés de façon adéquate.

    Faced with growing numbers of retirees, pension plans are pouring billions into hedge funds, the secretive and lightly regulated investment partnerships that once managed money only for wealthy investors.
     The plans and other large institutions are expected to invest as much as $300 billion in hedge funds by 2008, up from just $5 billion a decade ago, according to a study by the Bank of New York and Casey, Quirk & Associates, a consulting firm. Pension funds account for roughly 40 percent of all institutional money.
     This month, the investment council that oversees the New Jersey state employees pension fund said it would put some of its money into hedge funds for the first time, investing $600 million over the next several months. While most pension plans have modest stakes in hedge funds, others have invested more than 20 percent of their assets. Weyerhaeuser, the paper company, has 39 percent of its pension fund's assets in hedge funds. In Congress, there has been a push for amendments that would
make it easier for hedge funds to manage even more pension money, without having to comply with the federal law that governs company pensions.
     Pension officials who have been shaken by market downturns and persistent deficits are attracted by hedge funds' promise of richer, or more consistent, returns. But the trend has caused some consultants and academics to voice cautions. They question whether hedge funds, with risks that are hard to measure, are appropriate for pension funds, whose sole purpose, by law, is to pay out predetermined benefits to retired workers.
     Those benefits are considered so crucial that they are guaranteed: corporate pension failures are covered by the Pension Benefit Guaranty Corporation, a federal agency, while pension failures by state and local governments are covered by taxpayers. Given that the benefits are paid out on a set schedule, critics wonder whether it makes sense to rely on investments whose returns are hard to predict, managed by private partnerships that disclose little about their operations and charge some of the highest fees on Wall Street.
     "It's very inappropriate when the company is offering a pension plan that is guaranteed by the federal government," said Zvi Bodie, a professor of finance and economics at Boston University who is enthusiastic about hedge funds in other contexts.
     Hedge funds make large, sophisticated investments based on the premise that by swimming outside the currents of the markets, often betting against conventional wisdom, they can outperform other investments. Hedge funds became famous in the 1990's, when managers like Michael Steinhardt and George Soros made huge swashbuckling bets that sometimes produced returns of 30 percent or more.
     More recently, hedge funds have made headlines when they ran into trouble: Long-Term Capital Management, a hedge fund whose principals included two Nobel Prize-winning economists, nearly collapsed in 1998; and this summer, Bayou Group, a $450 million hedge fund based in Connecticut, shut down after most of its money disappeared. Its two officers have pleaded guilty to fraud charges. Hedge funds have traditionally been only for wealthy, sophisticated investors so regulators have not monitored them as they have stocks or mutual funds, although they are starting to do so.
     The news of splashy gains and scandals may not paint an accurate picture of a business that in many ways has become more conservative as a result of the flood of pension fund money. To attract that money, many hedge fund managers emphasize stability.
     Among pension fund managers, however, "the whole mentality has changed," said Jane Buchan, chief executive of Pacific Alternative Asset Management, which manages $7.5 billion in funds that invest in hedge funds, primarily for large pension funds. "They are saying, we need returns and we will be aggressive about getting them. They just don't want any downturns."
     One of the first pensions to start working with hedge funds is also the nation's biggest corporate pension fund, the $90 billion General Motors fund. It started with a small test investment in 1999 and increased it to about $2 billion in 2003, said Jerry Dubrowski, a G.M. spokesman.
     The company is using hedge funds, along with other unconventional investments, in hopes of getting something close to stock market returns without the market's volatility, Mr. Dubrowski said. To pay out the $6.5 billion G.M. owes to its retirees each year, the pension fund must produce annual returns of a little more than 7 percent. Otherwise, G.M. will have to dip into the fund's principal. At current interest rates, G.M. cannot get those returns with bond investments, and if it tries to juice returns by betting on the stock market, it will have to cope with market swings.
     "It's really not helpful to have that up-10, down-10" performance, Mr. Dubrowski said. "You want a return that allows you to cover the benefits payments without attacking the capital." It is that kind of consistency some pension mangers are seeking. "We are looking for consistently positive returns rather than the absolute highest returns," said Robert Hunkeler, manager of International Paper's $6.8 billion pension plan, which has been invested in hedge funds for around five years.
     Most pension funds have modest stakes of less than 5 percent, according to a recent J. P. Morgan survey. Verizon has 3 to 4 percent of its portfolio invested with hedge funds, and is considering adding to its investment, said William F. Heitmann, senior vice president for finance.
     Some pension fund managers say that diversifying away from stocks through a modest stake in hedge funds is reasonable, especially as hedge funds offer the promise of returns not linked to stock market performance. In 2000, for example, when the Standard & Poor's 500-stock index fell 9 percent, hedge funds rose 5 percent, according to Hedge Fund Research.
     The New Jersey state pension fund's investment of $600 million represents less than 1 percent of its assets, but it hopes eventually to raise the figure to $3 billion as part of a plan to diversify its portfolio, said Orin Kramer, the chairman of the oversight board.
     The New Jersey fund has been wrestling with a $30 billion shortfall, after the stock market bubble burst five years ago. "In recent years, conventional stock investments haven't worked," said Mr. Kramer, who is also a hedge fund manager. He said that in general it is good to diversify no matter what the market does.
     Other pension plan managers are far more aggressive. Eli Lilly has about 20 percent in hedge funds and the Pennsylvania state employees' pension fund has 22 percent. Weyerhaeuser's big position has significant benefits for the company. Accounting rules let companies factor expected pension returns into their operating income; Weyerhaeuser's hedge-fund-laden portfolio allows it to claim expected annual returns of 9.5 percent. By comparison, the 100 largest companies that sponsor pension funds predicted last year that their average long-term returns would be 8.5 percent, according to Milliman Inc., an
actuarial firm.
     For Weyerhaeuser, each 0.5 percent increase in the expected rate of return is worth an additional $21 million to the company's pretax income this year, according to S.E.C. filings. Weyerhaeuser did not respond to phone inquiries about its hedge fund investments, but said in S.E.C. filings that its actual pension investment returns more than justify its assumption of 9.5 percent.
     Hedge fund investors place a lot of trust in the funds' managers, giving them great flexibility in how they produce returns. The managers do not need to give investors specifics about trading activities, and there are no daily updates on the value of investors' holdings as there are with mutual funds.
     Employees of G.M., Verizon or International Paper, who are involuntary hedge-fund investors through their participation in pension plans, will not find any reference to the funds in those companies' annual reports. In their footnotes, these and other companies drop hints that a sophisticated investor might recognize as a reference to hedge funds, but they do not give the particulars. International Paper's description of its pension asset allocation, for example, breaks it down into "equity securities," "debt securities," "real estate" and "other."
     Some companies and governments, like Pennsylvania, make the argument that hedge funds are not really an asset class at all, but an "asset management tool" that does not have to be disclosed as part of the fund's allocation to stocks or bonds.
     That lack of disclosure has some regulators and pension specialists worried. Labor Department officials, who regulate pension funds, declined to discuss the hedge fund phenomenon, but referred to a 1996 letter the department wrote to the United States comptroller of the currency.
     The letter said that the Labor Department still expected pension officials to exercise prudence when investing in derivatives, a form of trading in which hedge funds often engage. The letter also said pension officials were responsible for understanding and fully vetting their hedge fund investments, and measuring how they might perform - and how they might affect the pension fund - under a variety of conditions.
     Susan M. Mangiero, author of "Risk Management," a textbook for pension officials, said she had come across pension executives who had not done that level of analysis. Some did not even know they had derivatives in their portfolios, she said. "A lot of well-intentioned people don't know they don't know," she said.
     In Washington, despite concerns over the health of the nation's pension system, there has been little discussion of pension plans' growing use of nontraditional investments.
     Even as Congress has been working to shore up the pension system and strengthen the Pension Benefit Guaranty Corporation, a provision to relax the pension law for hedge funds has been proposed. The provision would raise the limit on how much pension money a hedge fund can handle before it is deemed a fiduciary under the pension law, which would require it to be more prudent and careful than is required under securities law and would bar some trades entirely. The provision was added to a broad pension bill in the House shortly before the Committee on Education and the Workforce approved the legislation.
     Currently a financial institution becomes a pension fiduciary when more than 25 percent of its assets consist of pension money; the bill would raise that to 50 percent. The House bill would also change the definition of "plan assets," so that only corporate pension money would be counted, not pension money from government plans or foreign plans.
     These two changes are not in the counterpart Senate pension bill that was recently approved, but they could be added soon during efforts to reconcile the House and Senate bills. Wall Street's interest in overcoming these legal barriers shows the allure of pension money, which tends to stick with an investment strategy and is far less likely to fly out the door when the markets turn bad. "Pension money is the stickiest form of capital," Mr. Kramer of the New Jersey pension fund noted.
     But the surge of pension money is coming at a time when the returns of many hedge funds have not been as strong as in past years, raising questions about whether pensions are arriving at the party late. Hedge funds actually lost money in four of the first ten months of this year, although they still had an overall average return of 5.7 percent.
     Those returns easily beat the stock market: the S.& P. 500 index was up 1 percent in the same period. But as they continue to attract money, hedge funds may start to more closely mimic the performance of plain old stocks and bonds.
     "There is no such thing as a free lunch," said Frank Partnoy, a professor at the University of San Diego law school and a former trader at Morgan Stanley whose clients once included large pension funds. "And even if there were, nobody is offering it to pension funds."

    L'industrie - au sens de production de masse - des «hedge funds» ou fonds d'arbitrage, malencontreusement passés dans la langue courante sous cette appellation désormais fautive (fautive, car il ne s'agit plus de fonds de protection, comme le signifie leur traduction littérale, mais tout au contraire des fonds misant désormais sur la prise de risques), cette industrie d'un type un peu singulier est devenue au fil des ans un acteur incontournable de la gestion de fortune. Plus aucun conseiller financier ne s'aventurerait aujourd'hui à proposer une politique de placement qui ne contienne au moins un vingtième, sinon un dixième, de «hedge funds» à titre de diversification, sous-entendu d'amélioration du rendement total d'un portefeuille.
    En réalité on est tombé, en cédant à ce pur phénomène de mode, dans la dernière en date des chausse-trapes imaginées par les professionnels du marketing financier. Non pas que la prise de risque dans le but d'augmenter un rendement (la performance «bêta» des placements) constitue en soi un leurre, bien au contraire: vieille comme le monde, la technique est à l'origine des plus rapides fortunes, mais aussi des faillites les plus magistrales. Ce qui fait problème, c'est que la découverte et l'exploitation d'occasions rares d'arbitrage (l'«alpha»), autrement dit ce qui tient au mérite propre du gestionnaire et non à son exposition aux fluctuations générales et subies par tous du marché (volatilité des cours, des taux de change et des taux d'intérêt), est de moins en moins le propre des hedge funds. En bref et en résumé, on nous vend pour de l'«alpha» ce qui n'est en réalité que du «bêta».
    Et on nous le vend cher: les frais facturés par les managers de hedge funds comportent facilement, outre les 2% ou plus d'honoraires de gestion, 20% ou davantage d'honoraires liés à la performance, alors que celle-ci n'est dans le plupart des cas ni plus ni mains élevée que celle découlant, dans une gestion de type «traditionnel», d'un même degré de prise de risque.
Cette tendance, croissante, des hedge funds à se faire généreusement rémunérer pour l'«alpha» qu'ils prétendent avoir réussi à dégager, alors que leur performance n'est en réalité pas très éloignée du «bêta», commence à faire l'objet de sévères critiques de la part de certains observateurs avertis. Lors d'un récent séminaire tenu à Zurich, le professeur Erwin Heri (auteur d'ouvrages à succès sur la gestion de patrimoines et par ailleurs président d'un groupe bancaire spécialisé dans la gestion et le négoce de titres sur le marché suisse) n'a pas hésité par exemple à qualifier les prétentions financières des hedge funds de «complètement exagérées» («völlig überrissen»), et la rémunération de leurs gérants d'«indécente» («unanständig»).
    Il y a donc, incontestablement, besoin d'un sérieux coup de balai dans cette branche d'activité financière qui exploite sans état d'âme la crédulité des petits et grands épargnants jusque dans les conseils de fondation d'institutions de prévoyance.
Faut-il pour autant réglementer les hedge funds, comme l'envisagent certaines autorités de surveillance? Heri, à l'instar de beaucoup d'économistes, n'y croit pas trop, et préfère laisser au marché le soin de trier entre l'ivraie et le bon grain. Les vendeurs de fonds au détail, autrement dit la communauté bancaire dans son ensemble ou presque, y est évidemment opposée, et voit même dans l'absence de réglementation la raison première du succès de cette «nouvelle» classe d'actifs. Plus modestement, on se contentera de souhaiter une plus grande transparence sur un marché qui pour l'instant ne l'est guère, et une meilleure information d'un public prompt à croire au Père Noël.

Weltweites Vermögen der Hedge-Fonds. Grafik: Handelsblatt
     Wie stark die Macht der Hedge-Fonds wächst, verdeutlichen Zahlen: 1998 kontrollierten sie nach Schätzungen von Merrill Lynch ein Vermögen von 375 Mrd. Dollar, heute sind es über 1 Bill. Dollar und bis 2008 soll die Summe auf 3,1 Billionen steigen. Zurzeit gibt es weltweit etwa 9 000 Hedge-Fonds. Klaus-Wilhelm Hornberg, Direktor Asset Management bei Sal. Oppenheim, spricht Hedge-Fonds in Deutschland eine Katalysatorfunktion auf dem Weg zu stärkerer Wettbewerbsfähigkeit zu. „Das ist dringend geboten“, sagt der Fondsspezialist.
    Bislang seien Reden zum Shareholder Value, die Steigerung des Unternehmenswertes also, bei so manchen Managern lediglich Lippenbekenntnisse, urteilt sein Kollege Drill. Zu den Maßnahmen für höhere Wertschöpfung zählen die Experten den Verkauf von Randbereichen, da die Einzelbewertung der verschiedenen Unternehmensteile oftmals eine höhere Summe ergibt, als es dem aktuelle Aktienkurs entspricht.
    Das Beispiel Deutsche Börse zeigt außerdem, dass Hedge-Fonds Unternehmen zwingen, angehäufte Barreserven über Dividenden oder Aktienrückkäufe auszuschütten, wenn es keine attraktiven und rentablen Investitionen gibt.
    Die Spezialisten unter den Hedge-Fonds in derartigen Situation sind die so genannten Event-Driven-Fonds. Sie steigen mit Aktienpaketen mittelfristig bei Unternehmen ein, bei denen größere Veränderungen anstehen und versuchen durch Druck auf das Management oder über die Öffentlichkeit, wertsteigernde Veränderungen durchzusetzen. Die Zahl der Event-Driven-Fonds hat sich nach einer Analyse der Investmentbank Merrill Lynch in den vergangenen 15 Jahren verdreifacht. Trotz eines rasanten Wachstums steht die Investorengruppe noch immer nur für 15 Prozent aller Hedge-Fonds. Im dritten Quartal sammelten sie nach den Zahlen von Tremont Capital Management netto 3,9 Mrd. Dollar ein. Über alle Hedge-Fonds gesehen belief sich der Zufluss auf insgesamt 12,7 Mrd. Dollar.

BaFin-Chef Jochen Sanio fordert eine weltweite Regulierung von Hedge-Fonds. Foto: dpa
     Doch die Event-Driven-Fonds alleine können nur wenig bewegen. Sie sind nach den Worten von Drill zwar Rädelsführer mit großem Drohpotenzial gegenüber Publikumsgesellschaften. Allerdings müssten sie mit „guten Argumenten andere Aktionäre auf ihre Seite bringen“, ergänzt Pütz. Bislang haben nach Meinung der Experten gerade Publikumsfonds die öffentliche Auseinandersetzung in vielen Fällen gescheut. Doch die Schamgrenze etwa bei Hauptversammlungen werde zunehmend überwunden, stellt Hornberg fest. Und beim Fall Deutsche Börse haben Hedge- und Publikumsfonds zusammengearbeitet.
    Zudem kommt das Piggy-Riding in Mode, bei dem sich Investoren mit eigenen Käufen an das Engagement von Hedge-Fonds dranhängen.
    Eine künftig noch stärkere Kooperation zwischen den Beteiligten liegt nahe. Denn beim Sturz von Börsenchef Seifert durch Fonds konnte die Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) den Gesellschaften trotz vorhandener Hinweise kein abgestimmtes und damit unzulässiges Verhalten (Acting in Concert) nachweisen. Bei gebündelten Stimmrechten über 30 Prozent sind die Aktionäre verpflichtet, allen Anteilseignern ein Übernahmeangebot zu unterbreiten. Joachim Habetha, Partner bei der Kanzlei Lovells, bezeichnet die Entscheidung der BaFin als „erfreulich für den Kapitalmarkt“. Allerdings fehle eine richterliche Auslegung, die sich auch Chefaufseher Jochen Sanio wünscht, um Prozessrisiken auszuschließen.
    Die Hedge-Fonds können trotz Beteiligungen von oftmals drei bis fünf Prozent bei einem Unternehmen viel Druck entwickeln, da die Präsenz bei den Hauptversammlungen der börsennotierten Gesellschaften Jahr für Jahr fällt.
    Nach Berechnungen der Deutschen Schutzvereinigung für Wertpapierbesitz (DSW) lag sie im laufenden Jahr bei den 30 Unternehmen im Dax im Durchschnitt bei 45,87 Prozent. Zum Vergleich: 1998 erreichte die Teilnahmequote noch 60,95 Prozent. Doch beim Blick auf einzelne Unternehmen sieht es weitaus schlimmer aus. So konnte die Deutsche Bank in diesem Jahr nur 25,47 Prozent ihrer Anteilseigner zum Besuch der Hauptversammlung animieren.

Hauptversammlungen schlecht besucht
    Präsenz: Immer weniger Aktionäre geben ihre Stimme ab. Beim Reifenhersteller Continental betrug die Präsenz 2005 nur 23,55 Prozent.
    Gründe: Ausländer halten fast die Hälfte der Dax-Aktien, stimmen aber oft nicht mit ab. Sparkassen sowie Volks- und Raiffeisenbanken zogen sich aus der Stimmrechtsvertretung zurück.
    Internet: Die Internet-Hauptversammlung kommt nur für große Unternehmen in Frage, da sie teuer ist.

A federal appeals court on Friday sharply questioned the Securities and Exchange Commission's plan to tighten oversight of hedge funds. The outcome of the closely watched case will determine whether the agency will be able to oversee many hedge funds as the business is growing rapidly, with big investors...

La publication londonienne Hedge Funds Review vient de décerner à un produit de Lombard Odier Darier Hentsch l'un de ses 5 prix récompensant les meilleurs fonds européens de hedge funds. Le LODH Multiadvisers - Europe Equity Long/Short (EUR) est entête dans la catégorie des fonds de fonds spécialisés sur une année. Dans le cadre de l'«European Fund of Hedge Funds Awards 2005», cette récompense tient compte de la performance ajustée du risque, à la fin du mois d'août. A cette date, ce fonds a progressé de 15,7% sur 12 mois pour une volatilité de 4,3%. LT

    Unlike banks, building societies, insurance companies or stockbrokers, there are no mentions of hedge funds in the Yellow Pages. And it is highly unlikely you will find one based in your local high street, yet there are a lot of them around - and in some odd places too.
    Hedge funds are often linked to takeovers or other big trades in the financial markets, and they are often embroiled in regulatory debates. Hedge funds have become big players.
    It has been claimed that these privately owned investment companies are responsible for half the daily turnover of shares on the London stock market. Industry experts calculate that there are around 8,000 hedge funds operating globally, mainly in the USA, with hundreds based in the UK - primarily in the West End.
    But the reason they don't advertise in the Yellow Pages or any other similar directory is that they are not offering their services to the man or women in the street. Instead they offer their investment capabilities primarily to very wealthy individuals or to professional investors such as insurance companies and pension funds.

Rapid growth
    The world of the hedge funds has grown rapidly in the last 15 year or so. They first sprang up in the USA on Wall Street in the 1940s. They invest money - in anything that they think will make profits
    At first they concentrated on investing money for the extremely wealthy. The first time anyone in the UK outside the financial markets really heard of them was when the firm run by George Soros reputedly made hundreds of millions of pounds by betting that the pound would be ejected from the European Exchange Rate Mechanism back in 1992.
    The opportunity to make huge sums of money, not to mention looking after their own wealth directly, has since lured many traders and bankers in the City of London away from the big investment banks and investment management companies.
    They have set up their own firms, where they can run their own business and generate more of the profits for themselves. Some of these firms operate from discreet offices, where substantial amounts of money are managed by high-profile investment professionals with long track records in the business. Others have very few staff, relying on the investment judgement of just one or two people.

Varied strategies
    So what do they actually do? The simple answer is that they invest money - in anything that they think will make profits. Typically they focus on generating positive "absolute returns" (or returns greater than zero).
    Hedge funds embrace a wide variety of skills and strategies, generally grouped under the four following headings: Long/short equity - they aim to profit from superior research and stock picking skills by buying the best ideas and reducing the resulting stock market exposure by shorting (selling stocks they do not own) those they believe will perform less well.
Relative value - typically they use computer systems to calculate the "fair" value of one asset relative to another and then shorting the more expensive asset and buying the cheaper one.
Event-driven - they seek investment opportunities surrounding corporate events, for example, investing in bankrupt or merging companies.
Trading strategies - for example, taking positions on the direction of markets, currencies and commodities.
    So, hedge fund managers are essentially a group of active investment managers who invest in a variety of asset classes, with the licence to invest in a very flexible way. What is so special about them?
    The return achieved by a given hedge fund manager will (in theory) largely be driven by that manager's ability (or skill), rather than by underlying economic or market conditions. So they offer the potential to achieve investment returns with relatively low volatility and largely unrelated to whether a particular investment market (such as shares or bonds) is going up or down.
    The main reasons for this are: Hedge fund managers generally try to remove some market exposure and aim to produce a positive return irrespective of market direction. Often this will involve making an offsetting bet to hedge against losing money on the original investment position.
    The unrestricted nature of hedge funds means that the investment managers are able to fully utilise their skill to produce positive performance. Operating in fairly small areas of the market means that investing in a number of funds can reduce volatility through the benefits of diversification.
    One feature often attributed to hedge funds is the widespread use of derivatives; sophisticated bets on the future direction of an underlying asset such as a share, currency, or even a whole financial market. Some hedge fund managers will use derivatives almost exclusively, such as Contracts for Differences, rather than buying the underlying asset directly. In some cases a hedge fund may do this to build up a larger investment position than they could afford directly - known as leverage.
    The truth though is that the use of derivatives is commonplace in conventional banks, investment banks and other more sober financial outfits such as insurance companies and the treasury departments of big companies.

Easy money?
    Despite having a large concentration of investment expertise, hedge funds can still lose money for themselves and their clients, or provide just rather disappointing returns, so choosing the right ones is key. As noted earlier, the return from a given hedge fund manager is largely driven by the manager's ability or skill.
    There have been considerable flows of money into this area and increasing volumes of assets chasing the same opportunities may depress returns. Also, many hedge funds restrict how much money they will take on so they can sensibly manage the funds they already have, and it is not uncommon for the most skilled (and hence desirable) managers to be closed to new investors.
    They can charge very high fees, which can be high enough to erode any out-performance achieved by the manager, so due care is advised when selecting them.
    Most hedge funds are domiciled offshore for tax reasons. But if the managements who actually run the business are based in the UK then they should be subject to full regulation by the Financial Services Authority. Overall though, there are considerable risks involved in investing in one or just a small number of hedge funds.

Hedge fund indices
    As the interest in hedge funds has grown, a similar trend has developed to copy the mainstream financial markets: the "investable index". These indices - rather like the well known FTSE 100 share index - allow investors to allocate money across a range of strategies and managers, with the aim of generating returns that match one of the well known indices.
    This should also help to shed a bit more light on what has often been a very secretive world. Some funds simply won't reveal to anyone except their clients what their general trading strategies are, or how well or badly they have been doing. Others have become more transparent, publishing investment updates, quarterly or even monthly, that anyone can read.
    Despite that, an investor needs to decide if an index return is really the right target and whether the managers included are truly representative of the underlying managers in each strategy.

Conclusions
Hedge funds have become an increasingly popular form of investment for professional investors who have diversified away from mainstream share and bond investment. It should be noted, however, that they are only one option within an ever increasing range of investment strategies.
Their place should be considered alongside other alternatives such as private equity, property and commodities. The opinions expressed are those of the author and are not held by the BBC unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.

    Eine stärkere Regulierung von Hedgefonds ist nötig, sagt Alan J. Brown, Chefstratege der Investmentgesellschaft Schroders. Im Krisenfall seien die Kapitalmärkte gegen allzu große Schäden zwar gewappnet. Problematisch sei aber, dass die Fonds bei ihren Spekulationsgeschäften mittlerweile exzessiv Kredite einsetzen.
    Frankfurt am Main - Alan J. Browns Vertrauen in die Zentralbanken ist sehr groß. Und das aus gutem Grund. Der Chef-Anlagestratege der Fondsgesellschaft Schroders erinnert an die Ereignisse des 11. September 2001 in New York. Damals hatte der Terroranschlag auf das World Trade Center und damit auf das Finanzzentrum der Welt auch die Kapitalmärkte in Atem gehalten.
    Trotz großer Zerstörungen im Herzen der Wall Street schaffte es die amerikanische Notenbank Fed, dass der Kapitalverkehr verhältnismäßig ungestört weiterlief. "Die Bank of New York hatte ein arges Problem mit ihren Computerkapazitäten, so dass die reibungslose Abwicklung der Wertpapiertransaktionen gefährdet war", erzählt Brown. Die Notenbanker hätten das Problem sofort erkannt, und die Fed sei für die Bank eingesprungen. "Damals habe ich den Lender of Last Resort wirklich in Action erlebt", sagt Brown, und sie habe ihn von ihrer Effizienz überzeugt.
    Der 52-jährige Investmentprofi analysiert die Themen seiner Branche nüchtern. "Ja, ich bin für die Regulierung der Hedgefonds", sagt er. Für ihn, der seit mehr als 30 Jahren in diesem Geschäft tätig ist, ist die Regulierung der Fonds eine gute Sache. Schließlich seien die Prime Broker, also jene Banken, die die Geschäfte der Hedgefonds abwickeln, die Einzigen, die wirklich wüssten, wie die Fonds investieren. Interessenkonflikte sind in diesem Geschäft nicht ausgeschlossen. Auf der einen Seite müssten die Prime Broker darauf achten, dass die Kredite, die sie den Fonds gewähren, getilgt werden könnten. Auf der anderen Seite würden höhere Kreditvolumina auch höhere Einnahmen liefern.
    Das Risiko einer Hedgefonds-Blase ist seiner Ansicht nach vorhanden. Schlaflose Nächte bereitet ihm das aber nicht. Spekulative Übertreibungen gebe es immer irgendwo in der globalen Welt des Asset Managements. "Die Diskussion über den Risikofaktor Hedgefonds erinnert mich ein wenig an die Diskussion, ob es wieder einen Terrorangriff gibt", sagt er provozierend. Manchmal könne man den Eindruck bekommen, dass Hedgefonds und Derivate "der Teufel in neuem Gewand" seien, legt er schmunzelnd nach. Die Diskussion über Hedgefonds geht dem studierten Physiker nicht tief genug.

Spekulation auf Pump
    Der Zusammenbruch des Hedgefonds LTCM im Jahr 1998 sei von der US-Notenbank gut gelöst worden. Seitdem habe es einen solchen Fall nicht mehr gegeben. Trotzdem argumentieren die Kritiker hauptsächlich anhand des Falls LTCM. Aber auch in diesem Krisenfall habe die Zentralbank ihre Fähigkeit unter Beweis gestellt, sehr schnell und effizient zu reagieren. "Die Zentralbanken sind sehr effektiv darin, potenzielle Schocks auf den Finanzmärkten zu kontrollieren", ist er sicher.
    Allerdings will Brown ein allzu Fed fixiertes Bild nicht entstehen lassen. Er verweist auf eine Reihe interessanter Arbeitspapiere der Weltbank zum Thema Regulierung und systemische Risiken. Die Weltbank-Untersuchungen kamen zum Ergebnis, dass die Aufsichtsbehörden unabsichtlich selbst systemische Risiken schaffen.
    "Die Regulatoren erzwingen für alle Finanzintermediäre die gleichen Standards, beispielsweise durch das Value at Risk-Konzept", sagt Brown. Das Value at Risk-Konzept ist ein Verfahren, das zur Berechnung des Verlustpotentials aus Preisänderungen der Handelspositionen angewendet wird. In Krisensituationen könne die erzwungene einheitliche Anwendung des Verfahrens eine Kettenreaktion auslösen.
    Denn alle Marktteilnehmer müssten in bestimmten Situationen so schnell wie möglich die Risiken in ihren Kreditbüchern herunterfahren. "Die Vorschriften zwingen die Akteure zu einem gleichzeitigen Handeln", gibt Brown zu bedenken. Das aber könne eine Krise verstärken, wie man während der Russland-Krise leider beobachten musste.
    Damals hätten auch russische Unternehmen mit einem guten Rating am Markt kaum mehr Finanzmittel bekommen.
    Brown ist immer dann beunruhigt, wenn die Marktteilnehmer eine Art Herdenverhalten an den Tag legen, wie seinerzeit bei der Russland-Krise. Dass Hedgefonds zum Aufpeppen der zuletzt mageren Rendite von 4 bis 6 Prozent im Schnitt auf einen Leverage-Effekt setzten würden, also einen hohen Kreditanteil einsetzen, sei kein Problem.
    Mittlerweile bedienten sich jedoch immer mehr Marktteilnehmer dieses Finanzierungsinstruments. "Selbst bei Grundstücktransaktionen finden Sie irgendwo bestimmt eine Leverage-Komponente", so Brown. Der Einsatz von fremdfinanziertem Kapital erfolge exzessiv - und damit steige das Risiko. Auch in diesem Fall vertraut der Anlagestratege der Aufsicht. "Trotzdem", fügt er dann nach einem Moment des Nachdenkens doch hinzu, "die Gefahr des Platzens einer Leverage-Blase ist real."

DPA
EZB-Sitz: Studie prüft Risiken
    Kurz zuvor, im Sommer 1998, war die Russland-Krise eskaliert. Die Abwertung des Rubels machte russische Staatsanleihen über Nacht nahezu wertlos - und auch die Bonds anderer Staaten in den Augen vieler Investoren zu einem riskanten Geschäft. Daraufhin setzte eine beispiellose Fluchtbewegung in vermeintlich sicherere Geldanlagen ein.
    Meriwethers bis dahin renditeträchtigen Hedgefonds Long Term Capital Management trieb sie an den Rand des Zusammenbruchs. Denn LTCM hatte ausgerechnet auf Kursänderungen bei Staatsanleihen spekuliert. Am Ende ging dem Hedgefonds das Geld aus, um seine Verbindlichkeiten zu besichern. Das Eigenkapital schrumpfte auf 600 Millionen Dollar. Dabei jonglierte der Fonds zeitweise mit Finanzkontrakten im Gesamtwert von 1,25 Billionen Dollar.
    Nur eine gemeinsame Rettungsaktion der US-Notenbank und zahlreicher Großbanken rettete LTCM vor dem Kollaps. Mit einer Finanzspritze von rund 3,7 Milliarden Dollar verhinderten sie, dass der gestrauchelte Renditestar auf dem Kapitalmarkt einen fatalen Dominoeffekt auslöste. So sorgte das LTCM-Debakel nur für eine kontroverse Diskussion über die Regulierung riskanter Kapitalmarktgeschäfte.
    Heute, sieben Jahre später, ist die Debatte über eine strengere Kontrolle von Hedgefonds nach wie vor hochaktuell. Erst vor wenigen Tagen forderte die Bundestagsfraktion der Linkspartei/PDS, Hedgefonds in Deutschland künftig generell nicht mehr zuzulassen. Sie hätten sich in der Vergangenheit zu einem Problem für die Stabilität der Finanzmärkte entwickelt, formulierten die Antragsteller.
    Solche Forderungen sind zwar Extrempositionen in einer häufig emotional geführten Diskussion - und haben wenig Aussicht auf Erfolg. Doch auch die große Koalition in Berlin hat sich zum Ziel gesetzt, "auf internationaler Ebene für eine angemessene Aufsicht und Transparenz von Hedgefonds" zu kämpfen. Denn abseits sattsam bekannter Heuschrecken-Szenarien, nehmen Politiker und Finanzexperten die Frage, welche Gefahr die riskanten Fonds für die Stabilität des Weltfinanzsystems bergen, sehr ernst.

Woher stammt das Geld?
    Die Branche wächst rasant. Weit mehr als 8000 Hedgefonds sind mittlerweile weltweit zugelassen. Sie verwalten ein Fondsvolumen von insgesamt rund einer Billion Dollar.
    Und längst nicht alle stehen auf so festem Boden wie der Deutsche-Börse-Schreck TCI oder der mit 44 Milliarden Dollar Volumen weltgrößte Anbieter Man Group. Rund 1600 Hedgefonds, so schätzt das London Centre for Economics and Business Research, müssen möglicherweise innerhalb der nächsten zwei Jahre dichtmachen.
    Über die Folgen solcher Krisen entscheidet nicht allein die Frage, was die Fonds mit ihrem Geld gemacht haben, sondern vor allem, wo es herkommt. Denn üblicherweise stammt nur ein Bruchteil des Fondsvolumens aus Eigenkapital. Wirklich lohnend wird das Geschäft für die Renditejäger häufig erst, wenn sie ihre Spekulationen mit Hilfe von Krediten finanzieren. Im Extrembeispiel LTCM lag das Verhältnis von Eigen- zu Fremdkapital bei fast 1 zu 30 - mit einer entsprechend gewaltigen Hebelwirkung, dem so genannten Leverage-Effekt.
    "Der Einsatz von Fremdkapital vergrößert jedoch nicht nur die Renditen, sondern erhöht auch die Liquiditäts-, Markt- und Kreditrisiken", schreibt der Internationale Währungsfonds IWF in einem "Stability Report". Strauchelt ein Fonds, reißt er die Banken, mit deren Geld er spekuliert, mit in die Krise - mit kaum absehbaren Folgen für die Kapitalmärkte.
    "Die Risiken wachsen exponentiell", warnte Jochen Sanio, damals Vizepräsident des Bundesaufsichtsamtes für das Kreditwesen, schon 1998. "Die Selbstregulierung der Märkte hat bei den Risikofonds versagt", so Sanio, heute Chef der Finanzaufsicht BaFin, im Blick auf den LTCM-Crash.
    Aber haben die Marktteilnehmer aus dem Zwischenfall von 1998 tatsächlich Konsequenzen gezogen und ihre Kontrollmechanismen verbessert? Oder könnte sich ein Crash von LTCM-Ausmaßen jederzeit wiederholen? Eine aktuelle Studie der Europäischen Zentralbank (EZB) zeichnet ein nur vordergründig beruhigendes Bild. Die Bankenaufsichtskommission der Notenbank untersuchte die Abhängigkeit europäischer Großbanken von Hedgefonds - und kam zu einem nüchternen Ergebnis: Die jüngsten Entwicklungen in der Hedgefondsbranche stellten "nicht notwendigerweise eine direkte Gefahr für die finanzielle Stabilität" der EU-Banken und des europäischen Finanzsektors dar.
    Hauptgrund sei, dass das Prime Brokerage, also die Abwicklung und Finanzierung der Hedgefondsgeschäfte, von US-Banken dominiert werde. Die Engagements der EU-Banken fielen vergleichsweise klein aus. Die drei größten Prime Broker sind die Investmentbanken Morgan Stanley, Bear Stearns und Goldman Sachs, die jeweils zwischen 50 und 66 Milliarden Dollar an Hedgefonds ausgeliehen haben.

EZB warnt vor ernsten Problemen
    Scott Bugie, Managing Director für den Bereich Europäische Finanzdienstleister bei der Ratingagentur Standard & Poor's unterstützt die EZB-These: "In Europa gibt es faktisch keine Abhängigkeit der Großbanken von Hedgefonds", so Bugie gegenüber manager-magazin.de. "Selbst wenn die Hedgefonds allesamt schlössen, wäre das für die Banken keine große Sache." Einige europäische Institute seien zwar im Hedgefondsgeschäft beteiligt. Kein Geldhaus agiere jedoch als treibender Teilnehmer und bei keiner Bank sei das Engagement entscheidend für das Gesamtergebnis.
    Doch ganz so leicht wollen es viele Finanzexperten dann doch nicht nehmen. Die EZB-Formulierung "nicht notwendigerweise" ist in ihren Augen eben keine Entwarnung für Europas Banken. Denn die EZB-Studie hat in der Geschäftspolitik der europäischen Marktteilnehmer eine Reihe von Mängeln ausgemacht, "die zu einem ernsten Problem werden könnten, sollten die derzeit freundlichen Marktbedingungen umschlagen".
    So kritisieren die europäischen Bankenaufseher, dass einige Geldhäuser angesichts des harten Wettbewerbs ihre Risikoabsicherung aufweichten und große Hedgefonds so besonders freundliche Geschäftsbedingungen herausschlagen konnten. "Die großen Fonds scheinen genügend finanziellen Einfluss zu haben, dass sie Konzessionen erreichen konnten, beispielsweise in Form schwächerer Anforderungen für die Besicherung von Krediten", formulieren die Notenbanker.
    Auch Standard & Poor's-Experte Bugie räumt ein, dass die europäischen Banken in der Vergangenheit nur wenig an ihren Kontrollmechanismen verbessert haben. Dass ein Hedgefondscrash heute möglicherweise weniger dramatische Folgen hätte als noch 1998, liege vor allem daran, "dass die Engagements der Banken im Vergleich zu damals weitaus diversifizierter sind", so Bugie.
    Noch immer sind die Geschäfte der Hedgefonds für Außenstehende kaum zu durchschauen. "Die Prime Broker sind in diesem Geschäft die Einzigen, die überhaupt wissen, wie die Hedgefonds investieren", sagt der Chefstratege der Fondsgesellschaft Schroders, Alan Brown, im Gespräch mit manager-magazin.de. Doch selbst diese Einschätzung zweifeln Autoren der EZB-Studie an: Nach ihren Beobachtungen haben die Banken oft nur unzureichende Informationen über das Risiko, das die Hedgefonds mit ihren Anlagestrategien eingehen.
    "Die meisten Stresstests der Banken überblicken lediglich historische Daten", kritisiert die Studie. "Zudem haben die Banken meist nur Einzelengagements geprüft." Dabei bleibe unklar, ob die Beteiligungen verschiedener Banken die Folgen einer Fondsschieflage im Zusammenspiel möglicherweise noch verstärken. Zumal viele Hedgefonds ihre Kreditgeber offenbar im Unklaren lassen, wie viel Fremdkapital sie insgesamt einsetzen - und wie hoch damit der Leverage-Effekt ausfällt.

Kein Überblick im eigenen Haus
    Nicht einmal in ihrem eigenen Haus haben manche Finanzinstitute offenbar den nötigen Überblick: "Einige größere Banken hatten Schwierigkeiten, all ihre Hedgefondsengagements über verschiedene Geschäftsbereiche oder Regionen hinweg aggregiert zu betrachten", schreibt die EZB.
    Dass die europäischen Banken im Vergleich mit ihren US-Wettbewerbern eine eher geringe Rolle im Hedgefondsgeschäft spielen, ist da nur ein schwacher Trost. Das geringe Volumen der direkten Engagements europäischer Banken könne die tatsächlichen Risiken verharmlosen, schlussfolgern die Zentralbanker. Im Krisenfall könnten externe Effekte auftreten, "die nicht aus den direkten Engagements selbst abzuleiten sind".
    Solche Erkenntnisse sind Wasser auf die Mühlen der Regulierungsbefürworter. Zwar bemüht sich die EZB, die Ergebnisse ihrer Studie nicht zu dramatisieren. Die EU-Banken hätten durchaus klare Regeln für den Umgang mit Hedgefonds getroffen, betonen die Kontrolleure. Doch Forderungen nach mehr Transparenz und Kontrolle im Geschäft der Renditejäger wird das kaum entkräften.
    Im nationalen Alleingang dürften strengere Regeln freilich wirkungslos bleiben. Der scheidende US-Zentralbankchef Alan Greenspan, ohnehin ein Gegner staatlicher Fondsaufsicht, warnt seit langem, eine Verschärfung der Kontrollen würde gerade die aggressivsten Fonds aus dem Land treiben. "Wenn die Fonds abwandern", so Greenspan, "dann verlieren wir völlig die Übersicht."

Kontrollen lassen sich umgehen
    Das Beispiel USA zeigt aber auch, dass selbst die Einführung von Kontrollmechanismen nicht unbedingt zu mehr Transparenz führt: Vom 1. Februar 2006 an gilt dort eine Meldepflicht für Hedgefonds. Übersteigt das Fondsvolumen 25 Millionen Dollar und sind mindestens 15 Investoren beteiligt, müssen sich die Anbieter bei der Börsenaufsicht SEC registrieren. Sie unterliegen dann zudem strengeren Informationspflichten.
    Vor allem die etablierten Fondshäuser begrüßen diese Regeln. Doch einige Branchenvertreter treffen mittlerweile Vorbereitungen, die Kontrollen zu umgehen. Sie erwägen beispielsweise, fortan die Zahl ihrer Kunden auf maximal 15 zu begrenzen, um so der Meldepflicht zu entgehen. Ihre Risikostruktur und Anlagestrategie bleibt damit weiterhin im Dunklen.
    Schwacher Trost für die düpierten Aufseher: Eine Größendimension wie der gestrauchelte Fondsriese LTCM dürften diese Kandidaten kaum erreichen. Die Schockwellen eines Fondszusammenbruchs würde das zumindest etwas begrenzen.

ti. Immer wieder träumen Anleger vom schnellen Geld. Obwohl die Erfahrung zeigt, dass eine starke Korrelation zwischen Rendite und Risiko besteht und der Traum vom Reichtum an das Vermögen gehen kann, gelingt es gewieften Financiers immer wieder, Kunden für ihre Anlagestrategien zu begeistern. Vier Jahrzehnte nach Bernard Cornfeld, der mit der Zeile «Wollen Sie wirklich reich werden? Dann telefonieren Sie uns» in Zeitungen um anlagesuchende Gelder warb, rühmte sich Dieter Behring, ein ehemaliger Chemielaborant, den «genetischen Code» der Finanzmärkte entschlüsselt zu haben. Dieser vermeintliche
Quantensprung endete im Chaos: Im Herbst 2004 brach das «System Behring» zusammen. Seither fehlt von Anlagegeldern in Höhe von über 800 Mio. Fr. jede Spur.

Ein weit verzweigtes Netzwerk
Wie war das möglich? Dieser Frage ist Peter Zihlmann, ein vormaliger Rechtsanwalt, Strafverteidiger und Gerichtspräsident, nachgegangen. In seiner Analyse finden sich zwar keine abschliessenden Antworten, denn die Durchleuchtung und juristische Bewältigung des «Systems Behring» wird Jahre beanspruchen. Dafür zeichnet Zihlmann mit viel Sorgfalt den Aufstieg und Fall von Dieter Behring nach. Eingehend gewürdigt werden neben der Leitfigur selbst auch die anderen Hauptakteure, ohne deren Mitwirkung das System nie seine weit verzweigte Tätigkeit hätte entfalten können. Da ist der Anwalt Peter Weibel,
Behrings Partner der ersten Stunde, dessen weit verzweigtes Beziehungsnetz als Rekrutierungsreservoir für das «System Behring» diente. Nahezu alle handelnden Personen wurden von ihm angeworben. Seine Begeisterung für die Fliegerei veranlasste ihn dazu, Millionen in die erfolglose Entwicklung eines Ufo-ähnlichen Flugkörpers («Sky-Disk») zu stecken. Da ist auch der ehemalige Banker Raymond Pousaz, ein Bekannter Weibels aus gemeinsamen Zeiten im Harvard Club of Switzerland, der zu Behrings Statthalter auf den Bahamas avancieren sollte. Zu den Handelnden zählen ferner der Hausrevisor Arthur Buck und die Vermittler und Starverkäufer Willy Wüthrich, Jean Kämpf, Beat Bangerter und Jörg Rickli. Am Rande tauchen auch die Namen des inzwischen verstorbenen ETH-Professors Karl Frey, der Politiker Anita Fetz und Roberto Zanetti
und der vermeintlichen Nothelfer Kostas Liapis und Karl Prinz von Thurn und Taxis auf.

Haft als stärkster Beweisgrund
Zihlmann, der 1993 im Anlagebetrugsfall André Plumey als Strafverteidiger den zu sieben Jahren Zuchthaus verurteilten Hauptangeklagten vertrat, geht davon aus, dass es dereinst mit an Sicherheit grenzender Wahrscheinlichkeit zu einer Verurteilung Behrings kommen wird. Und dies trotz dem vom Bundesanwalt unsicher formulierten Verdacht, Behring habe zusammen mit Dritten potenzielle Investoren arglistig über die Erfolgsaussichten von Anlagen getäuscht und sich dadurch bereichert. Denn aus der Erfahrung Zihlmanns ist Haft stärker als jeder andere Beweis - anders als Weibel, der aus unerfindlichen Gründen nicht festgenommen wurde, verbrachte Behring ein halbes Jahr in Untersuchungshaft. Der Strafprozess, so schliesst Zihlmann, sei doch immer schon in erster Linie eine Selbstinszenierung des Staates auf Kosten der Opfer, Täter und Steuerzahler gewesen.

Peter Zihlmann: Der Börsenguru. Aufstieg und Fall des Dieter Behring. Orell-Füssli-Verlag, Zürich 2005. 232
S., Fr. 39.-.

But where’s the risk if you get your capital back? “I agree completely,” he says.
    Others point to how well McGrath’s analytical approach complements the more extrovert drive of Fink, who
now builds and runs the day-to-day business. McGrath even stood in when Fink fell ill in 2004. “Man operated as a partnership for decades before its IPO and that culture continues with Harvey and Stanley, who bring their own particular strengths in a strong team,” says Robert Swannell at Citigroup, which helped to float Man on the stock market 11 years ago. Fink describes McGrath as “one of the most intelligent men I have ever worked with”.
     Now McGrath is pushing that brainpower outside the company. This may partly be a nod to his roots — his father was a social worker in Belfast, and he is clearly keen to do more than just make money. Cynics will also note that Man, whose high-earning top team are regular press targets, may need a bit of image buffing.
     McGrath disputes that. He wants to see more input from financial services into making London a better place to work — hence his chairmanship of London First. “Financial services have played a huge part in London’s success. Many of the firms are foreign, they have chosen to locate banking and trading arms in London and they have a voice that should be expressed.”
     He also cites Crossrail and the London Olympics as issues he will be pushing on. “I think there is a need for a clear understanding of how business can engage to help deliver the Olympic Games.” Other involvements, you suspect, are less logical. The Man Booker? McGrath shrugs. “We wanted to find ways of raising the profile of the group. It appeals to our private clients and our distribution business, and the cachet is quite global.”
     McGrath sits on the advisory panel that selects Booker judges and says Man is likely to renew its sponsorship next year. Perhaps the group should manage a fund for the prize-winning author? “The prize is not quite that large,” says McGrath, sensing the trap coming. No indeed, at £50,000 the prize is barely enough to get one of Man’s plutocrats out of bed.
     But if I think I can needle a reaction out of McGrath, I am mistaken. His face remains like Belfast granite. It’s the same with questions on how he spends his money. He has nice houses in Kensington and Worcestershire, loves music, art and books, but seems most engaged in giving money away, rather than spending it.
     That is now a preoccupation with all of Man’s top team. Fink recently raised £10m for the new Evalina’s building at St Thomas’ hospital in London, much of it from the hedge-fund industry, He is also a generous giver to the Ark children’s charity. Next he wants to open an academy school, and he expects McGrath may follow suit.
     Have they got something to prove? “People can say that,” retorts Fink, “but I know plenty of wealthy people who give nothing away. For Harvey and me, the idea of putting something back was instilled in us by our parents.” McGrath, of course, is less expressive but just as committed. Watching Man Group cope with its success, and negotiate its way into the City’s top tiers, is already becoming compulsive viewing.

Vital statistics
Born: February 23, 1952
Marital status: married, with two children
School: Methodist College, Belfast
University: Cambridge
Salary: £362,000 and in June he cashed in £7m of shares
Homes: Kensington and Worcestershire
Car: grey BMW X5
Favourite book: Birdsong, by Sebastian Faulks
Favourite music: Mozart’s Requiem
Favourite film: 2001, by Stanley Kubrick
Favourite gadget: Blackberry
Last holiday: Budapest
Interests: music, reading, skiing

Harvey McGrath's working day
THE Man Group chairman wakes at his house in Kensington, west London, at 6.30am. Harvey McGrath exercises in his gym at home, breakfasts on fruit and then is driven into the office at 8am. “I take an hour or so first thing to think and to plan, before typically moving into a series of meetings, lunches and, frequently, dinners.” His wide range of interests outside Man means he can be at committee meetings across London. But he also likes to get involved inside Man, where he nominally works three days a week.
“I probably spend more time in the business than many non-executive chairmen. I was chief executive of the business for 10 years so I know it quite well. I will go and talk to people in different areas, and there are issues where one is asked to get involved.”

Working space
HARVEY McGRATH works from a glass-walled office overlooking the Thames at Man Group’s 1970s block
next to the Tower of London. Up on the sixth floor, McGrath is surrounded by Man’s top team. “We are perpetually short of space — which is a good thing, better to be short than long — but as a consequence we don’t have enough meeting rooms, so this doubles as a meeting room and is used by other people.” The whole block is decorated with contemporary art from the company’s collection.
A grand piano also sits in reception, part of Man’s Piano Man project. “We are sending a concert pianist round to schools that don’t have a strong music tradition to give workshops,” says McGrath. “And Blüthner, which provides the piano for the workshops, asked us to keep one in our reception. We’ve had the odd concert.”

    Investment bankers advise Britain's top companies about mergers or acquisitions, and how to fund them. It's a lucrative trade for the banks which charge massive fees for their services and pay their star advisers millions for attracting new business.
Step forward John Studzinski of HSBC who is thought to have been paid £13.5 million last year; while over at Barclays, dealmaker Bob Diamond could make £15m in 2005/6. At Goldman Sachs, chief executive Hank Paulson was paid £20m in shares and stock. On average, successful bankers can expect bonuses of between £5m and £15m.
     Dubbed the 'shock troops' of global capitalism by Philip Augur in his recent book, The Greed Merchants, investment bankers are usually dynamic and intelligent graduates of the best universities.
     Remuneration is generous, but the work is hard and not for the fainthearted. The hours are exacting and family life is put on the back burner when deals need completing or takeover battles are raging. Bankers only get the big money once a transaction is signed and sealed. A lot can go awry before that happens - a competition commission inquiry that goes the wrong way, a deal threatened because key shareholders cannot be persuaded that it makes strategic or financial sense, a sceptical media that undermines the rationale for a takeover, or resistance from an unwilling target.
     Says one veteran banker: 'where bids go hostile, or deals are unpopular with investors, life becomes intense. There are all-night meetings, constant phone calls and briefings.

You never switch off - but that's what we are paid for.'
     The key bankers in London are probably no more than a few dozen in number. They are known as rainmakers, the people at the top of their profession who make deals happen. Such bankers are sought out by chief executives when they embark on important deals because their experience, market nous and networks of contacts are formidable. They are mostly men (there are very few women at the top of investment banking) like Simon Robey of Morgan Stanley, Marcus Aegis of Lazard, Terry Eccles of JP Morgan, Simon Dingemans of Goldman Sachs, Robert Leitao of Rothschild, Bob Wigley and Kevin Smith of Merrill Lynch and Nigel Turner at ABN Amro.
     The bankers, of course, are paid by their client companies and the bigger the transaction, the chunkier the fees. They must do the company's bidding, although some deals are initiated by the bankers themselves when they persuade executives that a certain transaction makes sense. Managers, however, must be careful because they know that - at their worst - advisers can drive deals simply to ramp up fee income. And yet, chief executives speak highly of their bankers. In The Greed Merchants, Augur says: 'Good advisers have an insight into markets and industries and also an independence of mind. They challenge the beliefs and prejudices of senior management.'
     Augur quotes an executive describing a situation involving Goldman Sachs. 'They fielded a very impressive lady. She knew all the companies and all the players. We showed her a list of companies we were interested in. She said: "That's the one. It will be hard to get, but the fit is right,"'
     These days, the City's movers and shakers are not confined to bankers. The barons of private equity are playing an increasingly important role in mergers and acquisitions. With billions at their disposal they are taking over high street stores such as Debenhams, hotels chain Travelodge, and the AA. They are big purchasers of companies in Germany, where politicians have described them as 'locusts'.
     Men such as Martin Halusa, head of Apax and Damon Buffini, his opposite number at Permira are estimated to be worth £50m a piece, and that will probably rise to £100m after they have cashed in their stakes in the companies which their organisations have bought.
     But it is the managers of the hedge funds that are making the really big money. A survey by Institutional Investor magazine found that the top 25 managers made an average of £145m in fees and investment gains last year. Crispin Odey of Odey Asset Management is known to have collected nearly £9m, but others have probably taken home up to £40m. Even the most successful investment banker would find that hard to match.

    The Securities and Exchange Commission has sued HMC International, a small New Jersey hedge fund company, and its two principals, accusing them of misappropriating $5.2 million of the firm's $12.9 million to pay for their lavish lifestyles.
    An emergency enforcement action, intended to freeze all remaining assets, accused Robert A. Massimi, who managed the fund and was its head, and only, trader; and Bret A. Grebow of misrepresenting the fund's performance for 2001 and 2002 by more than 50 percent and of publishing false returns for 2003 and 2004. "In reality, the fund was little more than a Ponzi scheme," the complaint said, "with the defendants using new investor funds to meet redemptions of existing investors."
    Lawyers for the hedge fund, which is based in Montvale, N.J., and the two men did not return calls for comment last night.
    The S.E.C. action came on the heels of several prominent hedge fund scandals, including cases involving Bayou, Wood River and the KL Group. Hedge funds are lightly regulated pools of private capital from wealthy individuals and institutions. "In the world of unregulated hedge funds, it can be hard to tell fact from fiction," said Mark Schonfeld, regional director of the S.E.C.'s Northeast office. "This one was pure fiction. The defendants led lifestyles of the rich and famous at the expense of their investors."
    Mr. Grebow was featured in an article in The Wall Street Journal last year that emphasized his spending. According to the article, he had just purchased a Lamborghini Gallardo and had started chartering private planes, paying as much as $10,000 for short flights. According to the complaint, Mr. Grebow sent Mr. Massimi false trading records that stressed continual trading profits while at the same time transferring $2 million to his own account for personal spending. The two men were said to have paid themselves profit distributions from investor deposits that were based on the false statements.
    On Oct. 2, shortly after the S.E.C. started investigating, Mr. Massimi's wife opened a brokerage account in her maiden name, and Mr. Massimi transferred $1.5 million into the new account, according to the complaint. The fund represented itself as a low-risk "day trading" fund, which is similar to how Bayou, the $400 million hedge fund that collapsed this summer, characterized itself to investors.
    Mr. Massimi assured investors that he was a hands-on manager who diligently oversaw the fund's trading, the complaint said.

    Ah, the grand life of the hedge fund manager: the annual paychecks in the tens, if not the hundreds, of millions; the mansions in Greenwich; and the ski vacations in Aspen.
    But there is another other side of the business, one examined by Barton M. Biggs, the former Morgan Stanley strategist and now a hedge fund manager himself, in a soon-to-be published book. He writes about stressed-out managers struggling to maintain their lavish lifestyles as their funds suffer losses.
    One manager, identified as "Ian," would grind his teeth at night, according to an advance copy of the book; he shut his hedge fund after only three years, having suffered losses of more than 16 percent. "The pressure of living so intimately, so intensely with his portfolio (and dying a little on the bad days) has become intolerable," Mr. Biggs writes in "Hedge Hogging," (Wiley), which will be published on Jan. 6.
    Another trader was stung by losses after moving into a Greenwich estate with $20,000 trees, a two-story screening room and a wine cellar that could hold 5,000 bottles. "The straws were mounting on the camel's back even as dark clouds were gathering," Mr. Biggs writes. With losses approaching 30 percent, the manager had a breakdown and would not get out of bed, so his wife abruptly closed the fund.
    Mr. Biggs's empathy toward the hedge fund managers could stem from his own bumpy experiences as a manager, which he describes in the book. The book offers a rare peek inside a world that thrives on secrecy and the promise of outsize returns. A mystique has developed around hedge fund managers as they have become Wall Street's biggest clients and challenge some of the biggest companies - witness Carl C. Icahn and Time Warner.
    There is a perception that hedge fund managers are swimming in money; last year, a cover of New York magazine portrayed a manager in a bathtub full of dollar bills. They are spending tens of millions of dollars on the choicest artwork and real estate. Yet the average investor understands very little about how hedge funds - lightly regulated private investment partnerships - operate and how they make money.
    Mr. Biggs disguises the unfortunate managers in narratives he describes as "composites," or "impressionistic glimpses." The traders profiled in "Hedge Hogging" have made-up first names or nicknames like the Hot Young Tech Guy, Grinning Gilbert and the Trigger. Yet to those who know the business, it seems clear in some cases who is who in Mr. Biggs's exposé. The experiences of Ian, for example resemble those of one former Morgan Stanley trader turned hedge fund manager.
    That manager did not return calls seeking to confirm his identity.
    The book is a return to Mr. Biggs's role as a Wall Street commentator, recalling his days at Morgan Stanley when his literate essays on the markets were well circulated among investors. To the bafflement of his friends and peers, Mr. Biggs decided three years ago to leave his perch as one of Wall Street's elder statesmen and, at the age of 70, together with two partners, cast his lot with the high-strung traders, many of them half his age. He now runs a $1.5 billion hedge fund firm called Traxis Partners.
    "It is a young man's game," said Julian H. Robertson Jr., the hedge fund manager who shut his firm, Tiger Management, in 2000 after 20 years in the business. Mr. Robertson said that he enjoyed being free of the daily stresses of the money management business, but that Mr. Biggs, a longtime friend of his, thrives on being part of the fray. "Barton is in it for the love of the game; he loves the action," Mr. Robertson said.
    Byron Wien, another former Morgan Stanley strategist who recently joined Pequot Capital, a hedge fund, said of Mr. Biggs: "He is not constitutionally capable of choosing a passive life. He likes interacting with young people and other money managers."
    Mr. Biggs's track record at Traxis has been mixed. After a strong start in the second half of 2003, Traxis faltered in 2004, after making a giant, disastrous bet against oil. After losses of more than 7 percent by last summer, its flagship fund ended the year down 0.5 percent. This year, according to a letter to its investors, Traxis is up 13.3 percent before fees through November, partly because of a gamble on United States stocks. That compares with a total return of 4.9 percent for the Standard & Poor's 500 index for the period.
    Mr. Biggs declined to comment about his fund or his forthcoming book, citing Securities and Exchange Commission rules that restrict hedge funds from promoting their results. In his book, Mr. Biggs acknowledges the excesses of the hedge fund business but also sympathizes with those determined to beat the odds and challenge the markets.
    The stresses that Mr. Biggs describes have to do with the unique way that hedge fund managers are compensated. At the end of each year, these managers calculate their gains, and typically take a 20 percent cut of any profits, known as an incentive fee. In a good year, that can be highly lucrative, with managers of the largest funds earning several hundred million dollars.
    The largest hedge funds, with $1 billion or more under management, also make money from a 1 percent to 2 percent management fee they receive in good and bad years. But these riches accrue only to a small fraction of the 6,000 or so hedge funds in existence. The average hedge fund start-up has less than $200 million under management, and hefty overhead, including salaries for analysts and traders, as well as computers and rent.
    Mr. Biggs describes the Darwinian process under which thousands of hedge funds start, and then swiftly disappear, every year. "If the fund does well, the partners earn the 20 percent, get more money and wear smiles to bed," he writes. "If they really blow it in the first year, everybody redeems their money and they're gone with barely a ripple."
    Still, unlike many of the other funds described in "Hedge Hogging," Traxis was large enough to survive its losses. Assets are down from a peak of $2 billion, but the firm still has about $1.5 billion under management. Mr. Biggs' return to the hedge fund fray was particularly surprising given that he suffered his share of bruises during an early foray into the business.
    A hedge fund firm he helped found, Fairfield Partners, suffered some rough months during the bear market of the early 1970's. Mr. Biggs writes in "Hedge Hogging" that Fairfield rebounded from those losses, but he remains haunted by memories of that fund's struggles. "I remember waking up every night like clockwork at 3 a.m., literally in a cold sweat," he writes.
    More recently, Mr. Biggs expressed anxiety about a hedge fund bubble. "The hedge fund mania that now grips the U.S. and Europe is rapidly assuming all the classic characteristics of a bubble," Biggs wrote to Morgan Stanley clients in 2001. He went on to describe how certain investment strategies were being overwhelmed by too much money chasing opportunities.
    But less than two years later, Mr. Biggs decided to join the crowd and start his own hedge fund. People who know Mr. Biggs say he had a sweet deal when he set up Traxis. Morgan Stanley's investment management division sponsored the fund, which meant that the investment bank covered the costs of raising its capital and handles the ongoing legal, accounting and trade processing functions for Mr. Biggs, leaving him free to focus on investing.
    Morgan Stanley gets a share of the profits earned by the hedge funds and is also a prime broker for Traxis. A spokeswoman for Morgan Stanley declined to comment on the relationship. Even with Morgan Stanley's backing, Mr. Biggs faced an uphill march as he began raising money in early 2003, holding numerous meetings with skeptical investors. "I was a little disconcerted to be in Palm Beach grubbing for money with all the other twerps," Mr. Biggs writes.
    Then there was last year's disastrous bet against oil. The losses Traxis suffered led some long-term associates to withdraw their money. "Thirty years of confidence went down the drain in a couple of months," he writes.
    Mr. Biggs is both gratified, and a little anxious, about his comeback this year, according to a letter he wrote to Traxis investors describing last month's performance. He has made bold bets on emerging markets including Taiwan and Brazil. Closer to home, Traxis has invested in the NASDAQ 100 index as well as Internet companies like eBay, Google, and Amazon, according to the letter and Securities and Exchange Commission filings.
    For now, Mr. Biggs remains bullish on the stock market, even as he acknowledges a long list of risks in his letter to investors, including rising rates, an end to the housing bubble and overcapacity in China. "We ride the tiger with our fingers crossed," Mr. Biggs wrote.

Die deutschen Anleger können sich im kommenden Jahr auf eine ganze Reihe von Börsengängen einrichten. Nachdem 2005 mit immerhin 14 Neuemissionen den lang ersehnten Durchbruch für den hiesigen Kapitalmarkt brachte, verbreiten die Banken für das nächste Jahr noch mehr Zuversicht. Adam Young äußert sich als Co-Chef der Investmentbank ABN Amro Rothschild im folgenden Interview über Lehren aus dem Praktiker-Börsengang und die Rolle der Hedge Fonds.

Herr Young, was sind Ihre Erwartungen für den Neuemissionsjahrgang 2006?
Im Jahr 2005 hat sich der Aufschwung nahtlos fortgesetzt. Die Investoren hatten Geld, und es gab genug
Verkäufer, die ihre Beteiligungen an die Börse bringen wollten. Nun gab es einen zusätzlichen Faktor, der 2005 noch erfolgreicher gemacht hat als das Vorjahr: Der Markt für Fusionen und Übernahmen hat sich beschleunigt und dadurch auch das Geschäft mit Börsengängen angeheizt. Zudem haben die Investoren mit den Börsengängen der vergangenen beiden Jahre fast immer gute Gewinne gemacht. Solange sich das fortsetzt, werden die Anleger zugreifen. Wir sind also optimistisch für 2006.

Gilt dieser Optimismus auch für Deutschland?
Wir blicken mit großer Zuversicht auf den deutschen Markt. Die hiesigen Unternehmen haben zwar im Schnitt ein um 3,5 Prozentpunkte niedrigeres operatives Ergebnis als im Rest Europas üblich. Doch die Manager haben die Herausforderung angenommen und sind dabei, diese Rendite-Lücke zu schließen. Die Aktienmärkte honorieren das aber noch nicht.

Aber sind die Unternehmen mittlerweile nicht schon überbewertet?
In Deutschland gibt es noch viel Raum für Wertsteigerungen. Die Zuversicht der Investoren steigt hier. In Großbritannien ist das anders, hier sind die Bewertungen schon früher nach oben gegangen.

Besteht nicht die Gefahr einer Blase?
Nicht bei dem derzeitigen Kurs-Gewinn-Verhältnis (KGV) in Deutschland von 12 für das Jahr 2006. In der Vergangenheit lag der Schnitt zumeist bei 13 bis 15 - und selbst in wirtschaftlichen Krisenzeiten wie dem zweiten Golfkrieg oder der Ölkrise in den siebziger Jahren war er nicht niedriger als heute. Ich würde mir erst Sorgen machen, wenn die KGV's bei 18 bis 20 angekommen sind.

Wieviel Börsengänge erwarten Sie im nächsten Jahr?
Es gibt da leider nicht viel Transparenz. Die Konzerne überlegen sich alle, wie sie ihre Strukturen verbessern können und von was sie sich trennen sollen. Ein gutes Beispiel ist Metro, die diesen Prozeß auch durchlaufen haben und zu dem Schluß gekommen sind, daß es das Beste ist, die Baumarktkette Praktiker abzuspalten. Daß dieser Börsengang kommen würde, wußte Anfang 2005 niemand. Es ist also schwer, eine Zahl vorherzusagen. Mehr als 20 könnten es aber durchaus werden.

In den vergangenen beiden Jahren haben Konzerne und Beteiligungsfonds oft gleichzeitig einen Verkauf und einen Börsengang sondiert, wenn sie ein Unternehmen abgeben wollten. Werden wir diese sogenannten Dual-Track-Verfahren in Zukunft noch häufiger sehen?
In Großbritannien wird mittlerweile fast automatisch zweigleisig gefahren. Das wird auch in Deutschland so kommen. Denn ein Verkäufer kann dann sagen, er habe alles versucht, um den besten Preis herauszuholen. Jedoch gibt es auch noch andere Faktoren außer dem Preis, die den Prozeß beeinflussen. Ein Verkauf an einen Private-Equity-Fonds und ein Börsengang sind sehr unterschiedlich.

In den Bieterkämpfen um Unternehmen werden die Preise mitunter bis ins Unvernünftige hochgeschaukelt. Entsteht durch die vielen Dual-Track-Prozesse nicht eine noch exzessivere Preisspirale?
Die Gefahr sehe ich nicht, denn die Investoren sind heutzutage hochprofessionell und nicht willens, zuviel zu bezahlen. Die haben in der Vergangenheit einfach zu viel Geld verloren, als daß sie sich dazu verleiten lassen würden.

Diesen Realismus hat ABN Amro Rothschild bei dem Börsengang von Praktiker ja schmerzhaft erfahren müssen, als die Investoren die als überhöht empfundene Preisspanne nicht akzeptierten.
Die Banken haben die knifflige Aufgabe, einen Preis zu suchen, in dem sich alle Investoren wiederfinden. Bei Praktiker waren das insbesondere die deutschen institutionellen Anleger, die Privataktionäre und die angelsächsischen Investoren. Nun hatten wir mit der ersten Preisspanne ein Auftragsbuch, das mit einem Übergewicht angelsächsischer Investoren nicht ausbalanciert war. Wir mußten also sicherstellen, daß die deutsche Investorenbasis mit ins Boot kommt. Für Metro war das natürlich ein gewisses Opfer. Aber ein sehr sinnvolles, denn der Aktienkurs ist seit dem Börsengang um rund 10 Prozent gestiegen. Ein noch größeres Kursplus hätte bedeutet, daß die Aktie zu billig an den Markt gegangen wäre. So war es im nachhinein betrachtet einfach perfekt.

Wurde den deutschen Anlegern vor der Preisfindungsphase nicht genügend zugehört und wurden statt
dessen nur die angelsächsischen Investoren beachtet?
Unsere Aufgabe ist es, den maximalen Preis für den Verkäufer zu erzielen und gleichzeitig sicherzustellen, daß sich der Kurs nach dem Börsengang vernünftig entwickelt. Und wenn die Banken von der „Equity-Story” eines Unternehmens überzeugt sind, versuchen sie die Anleger dazu zu bewegen, ihre Preisvorstellungen anzuheben. Im Fall von Praktiker mußten die deutschen Anleger umgestimmt werden. Es kann aber auch genau andersherum laufen. In Frankreich haben wir ein Immobilienunternehmen namens Mercialys begleitet. Die französischen Anleger waren begeistert, aber die britischen Investoren wollten einen Abschlag. Wir haben ihnen dann gezeigt, daß der französische Markt mit dem britischen nicht vergleichbar und der Preis daher gerechtfertigt ist.

Beim Börsengang der französischen EdF haben Sie die Anleger ebenfalls auf Ihre Seite gebracht. Es gab einen regelrechten Ansturm der Privatanleger. Jedoch hat sich der Kurs nicht gut entwickelt. Wird EdF die T-Aktie Frankreichs; hat die Emission die Privatanleger von künftigen Börsengängen abgeschreckt?
Ich glaube das wirklich nicht. Jeder war überrascht von einer derart hohen Nachfrage der Öffentlichkeit. Zudem gab es einen Abschlag von einem Euro für die Privatanleger. Viele davon haben direkt nach dem Börsengang versucht, die Aktien zu verkaufen und sich damit den Gewinn von einem Euro zu sichern. Der französische Staat hat die Aktien zu dem Preis abgegeben, weil er genau weiß, daß EdF dabei ist, effizienter und somit wertvoller zu werden. Der Aktienkurs hat sich nun bei über 31 Euro stabilisiert. Es ist doch ein gutes Zeichen, daß es nicht automatisch kurzfristige Gewinne für Anleger gibt, sondern daß diese am Ball bleiben müssen.

Werden 2006 die großen Aktienplazierungen im Vordergrund stehen, oder werden kleinere ins Rampenlicht
rücken?
Weltweit wird es ein bis zwei Transaktionen in der Größenordnung einer EdF geben. Wir haben zum Beispiel - zusammen mit Goldman Sachs und UBS - das Mandat für die Rest-Privatisierung des australischen Telekom-Unternehmens Telstra gewonnen. Das könnte mit einem Wert von 18 Milliarden Dollar die größte Aktienplazierung der Geschichte werden. In Europa werden, was Börsengänge angeht, wohl eher die mittelgroßen Transaktionen im Volumen von 300 bis 700 Millionen Euro im Vordergrund stehen.

Spielen Privatanleger überhaupt noch eine nennenswerte Rolle?
In diesem Jahr haben wir die Rückkehr der Kleinanleger gesehen. Anders als vor einigen Jahren sind diese - auch dank der fundierten Medienberichterstattung - besser informiert und nicht mehr nur darauf aus, durch Zeichnungsgewinne ganz schnell eine Menge Geld zu machen. Die Kleinanleger konzentrieren sich auf die größeren Unternehmen mit bekannten Markennamen. Von kleineren, unbekannteren und risikoreicheren Börsenkandidaten lassen sie zumeist die Finger. Es ist keine Überraschung, daß sich gerade Neulinge aus der Biotechbranche 2005 bei Privatanlegern schwergetan haben.

Zunehmend tauchen bei Börsengängen auch Hedge Fonds als Investoren auf. Fürchten Sie das?
Diese Investoren sind für uns sehr hilfreich. Wir sind sehr froh, wenn wir Hedge Fonds an Bord haben.

Warum?
Sie sind flexibler als andere institutionelle Investoren, können die Unternehmenswerte gut einschätzen. Klassische Investoren haben nur die Möglichkeit, sich für einen Kauf zu entscheiden oder dagegen. Hedge Fonds können die Aktien kaufen und sich zugleich mit Derivaten gegen Kursverluste absichern. Sie erhöhen die Nachfrage nach neuen Aktien. Außerdem wissen sie extrem gut Bescheid über die Branchen, in die sie investieren.

Mehr als andere Investoren?
Nicht unbedingt, aber sie haben eine manchmal höhere Risikotoleranz. Ein Beispiel: In der vergangenen Woche haben wir in Großbritannien das Unternehmen Eco-Securities an die Börse begleitet, das sich auf den Handel mit Emissionszertifikaten spezialisiert hat. Der Handel startet erst im kommenden Jahr, aber die Verträge müssen jetzt geschlossen werden. Den meisten herkömmlichen Investoren kam das zu riskant vor, weil die Gesellschaft noch keine Umsätze hat. In Wahrheit ist das Geschäft aber sehr risikolos, denn mit dem Zertifikatehandel kommen automatisch die Umsätze. Die Hedge Fonds haben das
erkannt und wollten in die Aktie investieren. Das hat uns sehr geholfen. Am Ende hatten wir dann doch ein sehr ausbalanciertes Auftragsbuch.

Das heißt, Hedge Fonds übernehmen eine Art . . .
. . . Eisbrecher-Funktion für schwierige Marktsituationen, könnte man sagen. Sie können eine Vertrauensbrücke zwischen dem Börsengang und dem Handel danach spannen.

Welchen Anteil haben Hedge Fonds üblicherweise bei Börsengängen?
Sie erwerben mittlerweile ein Viertel bis ein Drittel der Aktien. Je kleiner die Transaktion, desto kleiner auch ihr Anteil daran. ABN Amro Rothschild hat sich zu den bedeutendsten Emissionsbanken gemausert. Kann es denn überhaupt noch weiter bergauf gehen? Wir sind fest davon überzeugt. Das Mandat für Telstra ist eine ungeheuer große Motivation für uns. Der australische Staat war bei der Auswahl der Banken extrem hart. Die haben alles auf Herz und Nieren durchleuchtet. Wer diesen Test besteht, der hat bei jedem anderen Börsengang sehr gute Chancen.

Welches Ziel haben Sie für den deutschen Markt?
In Europa waren wir 2004 und 2005 im Branchenvergleich auf Rang sieben. In Deutschland wollen wir die gleiche Größenordnung erreichen.

     If the exchange-traded-fund movement were a church, its high priest would be Bruce Bond. The 42-year-old first learned about exchange-traded funds, or ETFs, in 2000 as a marketing executive at money-management firm Nuveen Investments LLC. Part of his job was to sell ETFs, a relatively obscure kind of security that mimics the value of published stock indexes, such as the S&P 500, and are traded on major exchanges.
     "I became infatuated with them," said Bond. The Louisiana native became convinced that ETFs -- essentially a basket of stocks -- could one day supplant the mutual fund business as the dominant investment vehicle for individual American investors. In ETFs, Bond saw a way for investors to gain exposure to specific investment sectors and broad asset diversity without the management and tax costs of mutual fund investing.
     In 2003, when Nuveen decided to move away from ETFs in favor of more personalized investment advice, Bond and a team of Nuveen executives bought out the Chicago-based firm's ETF business and created PowerShares Capital Management in the leafy Chicago suburb of Wheaton. In less than two years, PowerShares has issued 36 ETFs, with many more in the planning stages. Its assets under management grew to $3 billion from $500 million last year alone, making it one of the fastest-growing investment-management firms in the country.
     After languishing as an investment novelty for most of the 13 years since they were invented, ETFs last year had a coming-out party, and their appeal with average investors is growing. It's only a matter of time before they begin stealing business away from the gargantuan mutual fund complexes that have dominated the investment world for a generation, Bond said. The biggest reason: They are cheap to own, having a typical management fee about half that of the mutual fund industry average. And they don't run up against the same tax consequences that most actively managed mutual funds, by the nature of their active management, do.
     Bond's enthusiasm aside, ETFs may not be for everyone. Because they are all index funds, at least for now, they may not be aggressive enough for investors who are looking to beat the market, not just match it. Some of the sector funds may seem too scary for investors uneasy about their economic antennae. And sorting through the dozens of ETFs out there is certainly not for those who would rather hand everything over to professional managers. "I think today that ETFs don't vie for the same retail investor dollars as mutual funds," he said. "It's really been a product up to now for the more sophisticated investors, like early adopters for consumer-technology products. "But I believe we're going to see that shift over the next year or two. In 2006, we're going to see ETFs really compete directly with mutual funds dollar for dollar."
     Already, in the latter part of last year, more money went into ETFs than went into stock mutual funds. In October, for instance, a net $11 billion went into ETFs, compared with $6.4 billion for stock mutual funds, according to the Investment Company Institute. "I think they could, in time, be bigger than mutual funds," said Kenneth C. Robinson, senior planner at the Monitor Group, a McLean firm that manages about $300 million for individual investors. "ETFs are going to force the mutual fund industry to be even more competitive in terms of cost and efficiency. It will be interesting to see what happens over the next several years."
     Of the major mutual fund companies, only Vanguard has made a significant push to offer ETFs. "The idea that it replicates an index has not really appealed to us," said Steven Norwitz, spokesman for T. Rowe Price, the big Baltimore no-load mutual fund company. "I think at this point, we're taking a wait-and-see attitude to see how long-lasting these things are." Norwitz said the liquid nature of ETFs -- they can be traded all day, just like a stock -- would seem to encourage active trading, something Price has never recommended. "People here just don't feel that way," he said.
     To be sure, the total amount of money in ETFs -- more than $312 billion at the end of the year, according to Barclays Global Investors, the largest purveyor of ETFs -- is minuscule compared with the nearly $9 trillion in about 8,000 stock mutual funds. But investing experts noted that 30 years ago, mutual funds started growing rapidly for much the same reason ETFs are growing today: They reduced the cost and the risks of investing for the average American.

What Are ETFs?
     The first U.S. ETF was the Standard & Poor's Depositary Receipts, created on the American Stock Exchange in 1993. Commonly known as the "Spider," it was a fund designed to perform exactly the way the S&P 500 performed. That, in essence, is all an exchange-traded fund is: an investment, readily tradable, that tracks a published stock index.
     ETFs exist as discrete funds, in much the same way mutual funds do, but there are crucial differences. Take as an example the Dow Jones Utility Average, a basket of stocks designed to track the performance of electric and natural gas companies. A fund manager wishing to create an ETF to track this index will ask Wall Street investment banks to underwrite the new ETF by contributing to the fund the same 15 stocks in the same weightings. In return, the ETF issues shares in itself to the investment bank of equal value to the investment bank's contribution of the 15 stocks. The investment bank then sells the fund shares to investors.
     That's the key difference: Where ETFs purchase the underlying stock with shares in the fund, mutual funds buy stocks with cash. Because the fund is based on an index, it isn't professionally managed by a gaggle of high-priced stock pickers. So, the costs of the funds are limited to the administrative costs of maintaining the fund (with a profit margin, of course, to the fund company that created it). That keeps an ETF's expense ratio -- the percentage of the fund's assets the fund-management company takes for its own -- much lower than that of most mutual funds. The average expense ratio in the mutual fund industry is about 1.4 percent. No ETFs charge more than 1 percent, and most charge less than 0.5 percent. Some large ETFs charge less than 0.01 percent.
     ETFs, because the purchase and redemption of their shares are accomplished by swapping real stocks for equally valued shares, do not have as many or as large capital gains taxes as many stock mutual funds. Capital gains taxes can be triggered, but only when changes in the underlying index cause the fund to sell a stock that's been booted off the index, and only then if the stock has increased in value since the fund was created. Dividends also cause capital gains for ETFs. Mutual funds often have to book capital gains during periods of high redemptions because the fund manager is forced to sell stocks to fund the redemptions, something that doesn't happen in an ETF.
     Barclays said none of its ETFs has had a capital gain distribution in four years. But the biggest taxable event for an ETF shareholder is when the investment is sold, and, as such, is determined by the individual investor, not by the fund manager.
     For all these reasons, ETFs have become a favorite of professional money managers, even those who specialize in picking individual stocks. "It's a great way to get low-cost exposure to markets where we can't be in individual securities," said Susan
Stewart, co-founder of Charter Financial Group in Washington. "We like them." For instance, Stewart's client portfolio is a mixed basket of individual stocks researched by her own team, yet she still owns a Japan equity ETF, because she wants to profit from Japan's economic growth without buying individual Japanese companies, and an ETF based on gold prices as an inflation hedge. "And they're cheap to own and buy," she said.
     Lastly, ETFs are traded like any other stock, with prices changing throughout the trading day, instead of being priced once a day the way mutual funds are. And, like stocks, they can be used in ways mutual funds can't: They can be shorted, or bought on margin.

Diversification
     It wasn't until 1996, the year Barclays began marketing newly created ETFs to professional money managers, that ETFs began to grow meaningfully. Barclays created about a dozen ETFs based on various broad market indexes as well as sector and geographic indexes. In 2000, Barclays decided to begin building a brand around the product: iShares.
     Barclays iShares are now the dominant form of ETF on the market. Lee Kranefuss, chief executive of Barclays iShares business, estimates that of the $312 billion in ETFs at the end of 2005, Barclays managed 55 percent of it. Barclays has an iShare for 102 indexes, including the S&P Small Cap 600, the Goldman Sachs Software Index and the MSCI Italy Index. Merrill Lynch, State Street Global Advisors and Vanguard are other major investment firms that have issued ETFs in recent years.
     But none has been as aggressive since 2004 as PowerShares. Of the 45 ETFs launched last year, 32 of them were issued by PowerShares. The firm's specialty is finding value-added indexes. For PowerShares, the benchmark indexes such as the S&P 500 are just starting points. For instance, many of its ETFs are based on the American Stock Exchange's Intellidexes, a group of stocks in a specific index that are picked to outperform the index as a whole. The 30 stocks for each Intellidex are picked by a scoring system that uses sometimes dozens of rankings of valuation and risk.
     PowerShares ETFs range include the general mid-cap and large-cap funds and funds based on lesser-known indexes, such as those focusing on the water industry or the nanotechnology business.
     Bond's idea is simple: Investors want intelligently picked stocks that can outperform benchmark indexes, but they don't want to pay mutual fund prices. "It was curious to me [during the mutual fund trading scandals of 2004] why investors didn't flee mutual funds," he said. "Of course the reason is they had nowhere else to go. This is finally a product for them that is truly a high-quality alternative to the only other alternative they have. They can compare for themselves between the two and decide."
     Yet all ETFs, as yet, are based on indexes, intelligent or not. The next horizon is actively managed ETFs, those that are based on a basket of stocks picked by a professional. Barclays's Kranefuss said that when actively managed ETFs hit the market, as he predicts they will, it will combine investors' desire to have a professionally managed fund with the expense and tax benefits of an ETF. "It remains to be seen" whether ETFs will overtake the mutual fund industry one day, Kranefuss said. "But it will depend on whether actively managed ETFs come out. No one has quite solved that yet, but it will be solved."

Drei Anlagemärkte werden abgedeckt
Immer im Plus: Verteilung der jährlichen Rendite, Wahrscheinlichkeit in %*Den europäischen Aktienmarkt präsentiert der Pioneer Top European Players (ISIN LU0119366952) der Muttergesellschaft Unicredit, der überwiegend in Unternehmen mit mittlerer und hoher Marktkapitalisierung investiert. Von Morningstar mit vier von fünf Sternen bewertet, erwirtschaftete der Fonds in den vergangenen drei Jahren eine durchschnittliche Performance von 17,3 Prozent.
Der von der HypoVereinsbank-Tochter Activest gemanagte Rohstofffonds Commodities C (ISIN LU0208311380) wurde erst vor rund neun Monaten aufgelegt. Sein Wertzuwachs liegt inzwischen bei 9,3 Prozent. Mit nur einem einzigen Produkt decken Investoren somit drei Anlagemärkte mit zum Teil gegenläufiger Kursentwicklung ab. Die Risikostreuung innerhalb der einzelnen Fonds, aber auch über die verschiedene Assets hinweg sorgt somit für eines hohes Maß an Sicherheit.

Gewichtung nach Performance am Ende der Laufzeit
Für das Investment spricht auch, dass die Gewichtung der drei Basiswerte erst am Ende der Laufzeit im Februar 2013 vorgenommen wird. Dann nämlich geht der Fonds mit der besten Performance mit einer Gewichtung von 50 Prozent in die Berechnung des Rückzahlungsbetrags für das Zertifikat ein. Der Fonds mit der zweitbesten durchschnittlichen Wertentwicklung wird mit 40 Prozent, der mit der schlechtesten Performance mit zehn Prozent bei der Ermittlung der Rückzahlungshöhe berücksichtigt.
Finanziert wird das Ganze durch die während der Laufzeit anfallenden Ausschüttungen der Fonds, die bei der Wertentwicklung unberücksichtigt bleiben. Schwerer noch wiegt die Tatsache, dass keineswegs die Fondswerte am Laufzeitende für die Wertermittlung des Zertifikats maßgeblich sind, sondern vielmehr ihre monatlichen Endstände, aus denen dann wiederum ein Durchschnittswert gebildet wird. Unterstellt man eine relativ kontinuierliche Aufwärtsbewegung, so nehmen Anleger auf Grund dieser Berechnungsmethode an der positiven Entwicklung der Fonds nur zu etwas mehr als der Hälfte teil. Höher fällt die Partizipationsrate dagegen aus, wenn die von den Fonds präsentierten Märkte zunächst stark ansteigen und vor Fälligkeit des Zertifikats einen Teil ihrer Gewinne wieder abgeben.

Durchschnittsrendite von 6,84 Prozent pro Jahr
Steckbrief: Best of Fonds ZertifikatAuf Basis entsprechender Simulationen hätte die durch das Best of Fonds Zertifikat verbriefte Strategie in den vergangenen 14 Jahren eine Durchschnittsrendite von 6,84 Prozent pro Jahr erwirtschaftet. Die Maximalrendite hätte bei 9,72 Prozent, die Minimalausbeute bei 2,37 Prozent gelegen. Verluste wären über den Gesamtzeitraum von jeweils sieben Jahren kein einziges Mal angefallen. Anleger, die solchen auf die Vergangenheit bezogenen Berechnungen nicht trauen und eine zusätzliche Absicherung wünschen, können für 1 Euro mehr an Ausgabeaufschlag auf eine Variante des Best of Fonds Zertifikats mit Kapitalgarantie (ISIN DE000HV1A2S2) zurückgreifen.
Grundsätzlich stellt sich allerdings die Frage, ob Anleger mit Einzelinvestments in die drei Fonds im Endeffekt nicht besser fahren würden. Eine rückwirkende Festlegung der Gewichtung ist dann zwar nicht möglich, bei etwas höherem Risiko liegt die Partizipation ohne Berücksichtigung der anfallenden Gebühren dafür aber bei 100 Prozent.

Aus der FTD vom 11.01.2006
© 2006 Financial Times Deutschland, © Illustration: ftd.de

Richtlinien für Leser-Kommentare
ZUM THEMA
Derivate: Geiz-ist-geil feiert Geburtstag
Investmentfonds: Neue Fonds geben vielen Anlegern Rätsel auf
Investmentfonds: Anbieter kaufen nun auch Zertifikate für Investmentfonds
(€) Derivate: Ausgeklügelte Paketlösungen
Portfolio: Innovationsfreude wird belohnt

CDS sind bilaterale Kontrakte, die sich auf ein bestimmtes Kreditrisiko (zum Beispiel Anleihen von Daimler-Chrysler) beziehen. Während der Laufzeit des Kontrakts verpflichtet sich der Sicherungsgeber (Risikokäufer), einen etwaigen wirtschaftlichen Verlust in der Referenzobligation bei Eintritt eines Kreditereignisses gegenüber dem Sicherungsnehmer (Risikoverkäufer) zu kompensieren. Als Kreditereignisse gelten üblicherweise vor allem Insolvenz oder Zahlungsverzug des Schuldners. Tritt ein solches juristisch vordefiniertes Kreditereignis ein, so liefert der Sicherungsnehmer eine entsprechende Referenzobligation an den Sicherungsgeber und erhält im Gegenzug dafür den Nennwert erstattet. Alternativ kann auch auf die Lieferung verzichtet werden und die Entschädigung komplett in bar gezahlt werden. Für diese Absicherung zahlt der Sicherungsnehmer eine Prämie an den Sicherungsgeber.

In diesem Jahr pendeln die Risikoaufschläge (Spreads) von CDS – gemessen am I-Traxx-Europe-Index – zwischen 0,36 und 0,38 Prozentpunkten und sind damit sehr niedrig, ähnlich wie die Risikoaufschläge von Unternehmensanleihen. Die meisten Experten fürchten, dass die Spreads in diesem Jahr steigen werden. Der I-Traxx-Europe-Index bildet die 125 liquidesten Credit Default Swaps europäischer Unternehmen ab. Es gibt verschiedene I-Traxx-Indizes, die Investoren aktiv handeln können. „Die Indizes haben die Transparenz und Liquidität des Marktes enorm erhöht“, sagt Regier. Meist reagierten die CDS und die Indizes viel schneller auf bestimmte Ereignisse als die Unternehmensanleihen. „Zudem sind die Umsätze bei Kreditderivaten deutlich höher als bei den Anleihen selbst“, betont Michael Zaiser, Stratege für Kredite und Derivate bei der Hypo-Vereinsbank (HVB).

Besonders aktiv am CDS-Markt sind Banken, gefolgt von Versicherern. Auch Hedge-Fonds und herkömmliche Investmentgesellschaften gehören zu den Marktteilnehmern. Deutsche Fonds dürfen Kreditderivate erst seit gut zwei Jahren einsetzen. Dafür müssen sie nachweisen, dass sie die Risiken messen und überwachen können. „Dabei hapert es noch an der Umsetzung, weshalb deutsche Fonds CDS nur vereinzelt einsetzen“, sagt Zaiser. Er geht aber davon aus, dass sich die deutschen Fonds in den nächsten zwei Jahren stärker auf CDS konzentrieren werden. „Das wird dem Markt noch weiteren Schub geben“, meint der Stratege.

Erfunden wurden die Credit Default Swaps in den neunziger Jahren von Banken, vornehmlich, um die Bücher von Kreditrisiken zu entlasten. Heute nutzen die Handelsabteilungen der Banken wie auch die anderen Akteure die Derivate auch, um bei steigenden Spreads Gewinne zu machen. „Bei herkömmlichen Anleihen kann man in der Erwartung steigender Risikoaufschläge einzelner Bonds nur besser als der Markt abschneiden, wenn man die Anleihen nicht im Portfolio hat“, erklärt Klaus Oster, Leiter des Kreditresearchs bei der Fondsgesellschaft Deka Investment: „Im CDS-Markt kann man dagegen durch den Kauf von Sicherung direkt von steigenden Spreads profitieren.“

Außerdem gilt das größere Anlageuniversum im Derivatemarkt als Vorteil. Mit den CDS lassen sich Kreditrisiken auf alle Laufzeiten nachbilden, auch wenn es keine entsprechenden Anleihen gibt. „Das führt auch dazu, dass sich die Risiken über die einheitlichen CDS besser vergleichen lassen als über Anleihen, die in Laufzeit und Ausstattung stärker variieren“, sagt Oster. „Hinzu kommt die Hebelwirkung, weil sich Risiko handeln lässt, ohne dass Anleihen ge- oder verkauft werden müssen.“

Die Hebelwirkung wird jedoch auch kritisiert, genau wie die Tatsache, dass nicht nachvollziehbar wird, wer welche Derivate hält, so dass ein Systemrisiko entsteht. Gefahren sehen etwa die Bank für Internationalen Zahlungsausgleich (BIZ) und nationale Aufsichtsbehörden auch dadurch, dass es bei der Abwicklung der Derivategeschäfte zu Verzögerungen kommt, was bei tatsächlichen „Credit Events“ die Turbulenzen an den Finanzmärkten verstärken könnte. JP-Morgan-Fachmann Regier hält dagegen, dass es der Stabilisierung des Finanzsystems diene, wenn die Risiken breit gestreut seien: „Außerdem entwickeln die Marktteilnehmer die Risikomodelle und die Abwicklung weiter, so dass das systemische Risiko stetig abnimmt.“

Credit Default Swaps (CDS) sind die bedeutendsten und liquidesten Kreditderivate. CDS machen Kreditrisiken handelbar – unabhängig von den zu Grunde liegenden Anleihen oder Krediten. Wer die Sicherung kauft, muss dafür eine Prämie bezahlen. Der Markt entstand in den 90er-Jahren und hat zum Teil pro Jahr Wachstumsraten von über 100 Prozent. Derzeit sind weltweit CDS-Kontrakte über 12,4 Billionen Dollar am Markt. Die Teilnehmer Erfunden wurden die CDS in den 90er-Jahren von Banken. Inzwischen sind auch viele Versicherer auf dem Markt aktiv, ebenso wie Hedge-Fonds, Investmentgesellschaften und Unternehmen.

CDS sind die Grundlage für viele andere derivative Produkte, zum Beispiel synthetische Asset Backed Securities, bei denen Kreditrisiken übertragen und als Wertpapiere an den Markt gebracht werden.

Les employés de UBS (UBSN.VX) retiennent leur souffle. Ces jours-ci, ils reçoivent leurs lettres personnelles indiquant le montant des bonus qui leur seront versés pour 2005, avec le salaire de février. La grande banque suisse, par la voix de son président Marcel Ospel, a déjà annoncé que le total des bonus dépasserait 9 milliards de francs.

Neuf milliards était la somme qu'a versée UBS en 2004 et qui représentait 49% de la masse salariale de 18,2 milliards. Ce montant, qui sera dépassé en 2005, paraît à première vue énorme. A titre de comparaison, les banques d'affaires de Wall Street verseront toutes ensemble l'équivalent de 27 milliards de francs sous forme de bonus pour 2005.

Comment cette somme se répartit-elle sur les 70500 employés du géant helvétique? Chez UBS, les collaborateurs de base, et pas uniquement les cadres, peuvent toucher un bonus (dès environ 5000 francs). Le bonus se compose d'une part en liquide, d'actions et de stock-options, de contributions de l'employeur à la caisse de pension et de prestations en nature.

Dans un monde idéal, ce gâteau de 9 milliards se partagerait en morceaux égaux de 128000 francs par collaborateur. Mais les talents et la contribution varient fortement d'un métier à l'autre et les montants gonflent à mesure que l'on progresse vers le top management jusqu'à Marcel Ospel. L'homme le mieux payé du groupe a empoché 21,3 millions l'an dernier, dont un bonus de 19,3 millions. 9,5 millions lui furent versé en cash et le reste principalement sous forme d'actions. En additionnant ce bonus à ceux du CEO Peter Wuffli, des membres du conseil d'administration et des CEO des six divisions (John Costas, John Fraser, Peter Kurer, Marcel Rohner, Clive Standish et Mark Sutton), on obtient 200 millions de francs. Le «top management» représente donc 2,2% du bonus total du groupe. Certes, il s'agit de 17 personnes, soit 0,02% de l'effectif. Pour le reste du management, UBS ne fournit que le montant global, de ce qu'ont touché les sept membres de la direction, ainsi que trois membres exécutifs du conseil d'administration: 176 millions.

Reste à estimer comment se répartissent les 8,8 milliards restants sur le personnel du groupe, dont quelque 20000 spécialistes de haut vol. Nous avons mis les bonus pratiqués par le marché en rapport avec le nombre de professionnels du front office (qui regroupe les métiers directement exposés à la clientèle), dans le Wealth Management (acquisiteurs, gérants, conseillers financiers) et dans l'Investment Bank (traders, conseillers en fusions et IPO).

     Quels sont-ils et comment s'informer? A la différence des fonds de placement, les commissions sont extrêmement basses. Et leur accès est aisé au petit investisseur. Mais le boom actuel ne se lit malheureusement pas dans les chiffres d'affaires en Bourse. Cela tient au fait que les émetteurs ne désiraient pas coter tous leurs produits en Bourse pour des raisons de coûts et préféraient traiter ces opérations sur le marché dit OTC. Les émetteurs donnent leur propre nom aux produits, bien qu'ils offrent exactement le même profil de rendement. Cela rend le travail d'information de l'investisseur plus ardu. Un «Leman» de la BCV (BCVN.S) correspond exactement à un «Goal» de UBS (UBSN.VX) et à un «Revexus» de Credit Suisse (CSGN.VX). Il s'agit toujours du même type de produit, c'est-à-dire d'un «reverse convertible».
     Le site internet «www.warrants.ch» est le leader suisse des moteurs de recherche gratuits. Son rôle est justement d'apporter de la lumière dans la jungle de ces produits. D'un côté, il est possible d'y lire le résumé des conditions des émetteurs sur la plupart des produits cotés à la Bourse SWX. D'autre part, à l'aide de différentes fonctions de recherche, il est possible de comparer l'ensemble d'une catégorie de produits, comme les «reverse convertible sur Nestlé» indépendamment de l'émetteur. Depuis le début janvier, la Bourse publie également à travers sa base de données SMF les chiffres clés et liens de tous les
produits.
     L'investisseur, avant chaque achat, devrait comparer les produits offerts par chaque émetteur sur une plate-forme indépendante. Pour adapter ses connaissances au nec plus ultra de la finance, on préférera assister aux séminaires organisés par les courtiers en ligne indépendants plutôt que ceux des émetteurs.

     Alors qu'Arcelor (LOR.PA) continue à s'opposer farouchement à l'offre publique d'achat (OPA) inamicale lancée contre elle, Mittal Steel pourrait se tourner vers des alliés pour parvenir à ses fins. L'industriel d'origine indienne pourrait en effet bénéficier de la complicité des hedge funds, qui dans un premier temps achèteraient massivement des actions d'Arcelor, puis les vendraient à Mittal Steel.
     Les hedge funds participeraient à une telle «cabale» dans l'espoir de revendre les actions d'Arcelor avec un gain substantiel. Cette technique dite «Merger arbitrage» est régulièrement utilisée en cas d'opposition à une OPA.
     Sur le plan politique, Laxmi Mittal a poursuivi son opération de charme dans les capitales européennes. Le Luxembourg et la France sont toujours opposés à l'OPA, même si le ton a baissé d'un cran à Paris. L'une des raisons pourrait être la prochaine visite du président Jacques Chirac en Inde. Il y conduit une délégation commerciale dans trois semaines.
     Les Indiens ont en effet commencé à lever la voix contre certaines positions en Europe, dans certains cas à la limite de la xénophobie. Le ministre indien de l'Industrie, Kamal Nath, a fait remarquer que New Delhi a accueilli les bras ouverts l'arrivée du cimentier Lafarge (LG.PA) en Inde en 2005. La position indienne a été défendue par Londres où le ministre du Commerce et de l'Industrie, Alan Johnson (JNJ), a dénoncé le protectionnisme de certains pays européens.
     Mesure de rétorsion contre le Luxembourg? Mittal Steel a annoncé la fermeture en 2009 ou 2010 de l'usine qui s'y trouve et dont il est actionnaire majoritaire. Quelque 300 emplois sont concernés.

Bernard Dumas: Je viens de passer sept ans à l'INSEAD. C'est un établissement actif, mais aussi très bousculé et qui doit répondre à des impératifs financiers et commerciaux. Il me reste six ans devant moi avant l'âge officiel de la retraite. Je veux en profiter au maximum et conduire les recherches qui m'intéressent le plus. Elles portent sur la finance de marché, et correspondent aux intérêts du SFI.
En outre, je ne viens pas ici dans l'inconnu puisque j'ai fait partie du comité scientifique de FAME (ndlr: fondation genevoise qui s'est fondue dans le SFI). Je connais bien plusieurs professeurs, j'ai même dirigé la thèse de l'un d'entre eux. Je sens aussi à Lausanne une bonne alchimie et la visée scientifique de l'institution me motive.

- Allez-vous juste faire de la recherche?
- Non. J'aurai un poste de professeur ordinaire à HEC Lausanne et donnerai donc des cours en Bachelor, Master et dans l'école doctorale. J'encadrerai aussi des thèses.

- Sur quels thèmes de recherche allez-vous travailler?
- Je voudrais arriver à voir comment on peut calculer un équilibre sur les marchés financiers en tenant compte des coûts de transactions. Aujourd'hui, je suis scandalisé que l'on fasse de la finance sans frottement. C'est comme si on réfléchissait aux problèmes des entreprises sans intégrer une fonction de coût. Pourtant, ces frottements, des coûts non seulement physiques mais aussi liés au traitement de l'information, justifient précisément la finance. Sans ces imperfections, on pourrait se passer des financiers.

- Les banques travaillent depuis longtemps sur la question. Elles regroupent leurs salles de marché pour limiter leurs coûts. Près de New York, UBS (UBSN.VX) en a monté une grande comme deux terrains de foot...
- Oui, mais la littérature académique dit en fait peu de chose sur les économies d'échelle, qui ne sont d'ailleurs pas le seul élément qui compte pour concentrer ce type d'activité en un seul endroit. Dans une salle de marché, les clients passent des ordres d'achat et de vente. Si un déséquilibre se produit pour un trader, il peut se retourner vers ses collègues pour dénouer sa position. Mais, ce faisant, il ne perçoit pas l'écart entre le prix coté à la vente et le prix coté à l'achat. Plus il y a de déséquilibres, moins la salle de marché est rentable. Dans ces conditions, plus la salle de marché représente une part importante du marché lui-même, plus il y a de chance d'y obtenir un équilibre naturel ou de percevoir les déséquilibres à venir, et par conséquent d'améliorer sa rentabilité. Les banques ne créent donc pas de grandes installations uniquement pour limiter leurs coûts de fonctionnement.

- Avez-vous un autre grand sujet de recherche?
- Je travaille aussi sur la façon de calculer un équilibre en tenant compte du risque de défaut de paiement, des individus ou des entreprises.

- Par exemple?
- De plus en plus de chercheurs essaient de modéliser la pénurie de capital-risque pour l'arbitrage. Dans les modèles, les arbitragistes ne peuvent pas emprunter plus qu'un certain montant, fixé arbitrairement. Si une opération d'arbitrage se présente et qu'ils se trouvent au maximum de leur capacité d'endettement, ils ne peuvent exploiter cette possibilité d'arbitrage. Il est absurde que tous les autres gérants ne puissent pas profiter de cette occasion d'arbitrage. En revanche, si chaque gérant y avait accès mais avait un risque de défaut, cela amènerait les prêteurs à faire attention aux risques que prennent les acteurs du marché et à décider de prêter ou pas en fonction de ce critère.

- Vous étudiez beaucoup les marchés financiers. Trouvez-vous que les intervenants agissent de façon rationnelle?
- Non! Dans mes travaux, j'ai modélisé deux groupes d'intervenants. Le premier agit de façon rationnelle, et met à jour ses croyances sur la probabilité de réalisation des événements selon les informations qui tombent. Le second réagit aussi, mais accorde trop d'importance aux dernières nouvelles. Ces derniers sont chaque jour convaincus d'une chose, mais prêts à soutenir le contraire le lendemain! Ils passent donc trop d'ordres d'achat et de vente de titres. Ces traders créent une volatilité excessive sur les marchés.
Nous montrons que de ce fait les prix sont tirés vers le bas particulièrement lorsqu'un marché compte autant d'acteurs des deux groupes. La suractivité et les changements d'avis des traders irrationnels créent un sentiment d'incertitude, qui se traduit par une prime de risque. Plus cette prime est grande, plus les prix sont bas.

- Vous parlez de modèles. Mais les avez-vous confrontés aux données réelles?
- Pas encore pour le modèle dont je viens de parler, mais je compte bien le faire. Nous avons par contre mesuré combien de temps il faut pour que ces acteurs irrationnels quittent le marché. Milton Friedman (ndlr: Prix Nobel d'économie en 1976) dit qu'il suffit que quelques acteurs rationnels et très intelligents interviennent et profitent de la surréaction des autres pour que ces derniers disparaissent rapidement. Nous avons retenu des paramètres plausibles et sommes partis d'une population composée à part égale de ces deux catégories d'acteurs. Résultat: cela prend 230 ans avant que les irrationnels représentent moins de 20% de l'ensemble des acteurs... Les idiots ont la vie dure! Et pendant ce temps, leur présence cause une grande perte pour l'économie.

- Utilisez-vous des éléments de la finance comportementale, qui s'appuie sur la façon d'agir des investisseurs?
- Les financiers ont ce vieil adage: «Cut your losses and let your gains run» (ndlr: vend ce qui t'a apporté des pertes et garde ce qui t'a apporté des gains). Or, on constate que les ménages sont réticents à vendre les titres qui ont réalisé des pertes. Ils attendent que le cours change de direction. Le trader qui obéit à l'adage prend donc le contre-pied de ce comportement. C'est de la finance comportementale, un sujet que j'ai un peu exploré dans de récents travaux.

- Que pensez-vous des «chartistes», qui tentent de deviner l'évolution des cours de Bourse à partir de la forme des courbes de prix?
- Je ne vois pas à quoi correspondent leurs «patterns» (ndlr: figures répétitives des courbes). Ce n'est pas une théorie. On ne peut pas s'en servir pour tirer des plans d'action.
Ces formes des courbes de prix boursier peuvent résulter de la présence de traders irrationnels, qui les suscitent. Il existe ainsi une correspondance confuse entre le chartisme et la finance comportementale.

- Une autre question taraude les investisseurs: peut-on battre le marché?
- Le problème, c'est qu'on ne s'entend pas sur la définition de ce dont on parle. Il y a ceux qui croient à l'efficience des marchés, et les autres. Mais l'efficience suppose une parfaite information des acteurs. Or la collecte des nouvelles a un coût. Si les Bourses étaient parfaitement efficientes, il n'y aurait aucune motivation pour aller chercher des informations. Tout serait accessible, on ne pourrait donc en tirer aucun avantage particulier et battre le marché. Ce raisonnement par contradiction montre qu'il doit toujours subsister sur le marché une certaine part d'inefficience.

- Certes, mais on observe que bien peu de gérants parviennent à faire mieux que les indices de manière régulière?
- C'est vrai, mais en même temps il est difficile de le mesurer. Car les bons gérants de fonds de placement quittent le marché, créent leur hedge fund, et ne rentrent plus dans les statistiques de comparaison.

Le Temps: Nous avons beaucoup parlé des actions. Avez-vous travaillé sur les devises?
Bernard Dumas: Oui. Grâce à une nouvelle méthodologie, j'ai montré qu'une longue période de déséquilibre peut se produire avant que le taux de change ne retourne vers sa valeur de long terme. Appliqué à des données américaines, notre modèle met beaucoup mieux en évidence ce phénomène que les travaux précédents.

- Vous inquiétez-vous alors du déséquilibre extérieur des Etats-Unis et de ses conséquences possibles sur le dollar?
- Par le passé, on a déjà observé de longues périodes de surplus et de déficit extérieurs américains. Une telle situation n'est pas forcément extrêmement préoccupante, parce qu'elle ne contredit pas nécessairement l'analyse économique. Les pays en forte croissance, ce qui est plutôt le cas des Etats-Unis, connaissent souvent un déficit.

- Tout de même, le déficit américain est gigantesque...
- La situation est effectivement préoccupante. On se demande pourquoi les Asiatiques investissent autant dans les bons du Trésor américain. L'opération est à l'évidence coordonnée par les gouvernements. Mais jusqu'à quand durera-t-elle, et que se passera-t-il quand ils changeront de politique?

Naissance le 8 juillet 1947 à Corbeil-Essonnes.
1966-1969: Ecole centrale des Arts et Manufactures (Paris).
1970-1975: doctorat puis professeur assistant à Columbia University (New York).
1982-1999: professeur à HEC (Paris).
1985-1993: professeur de finance à Wharton School.
Depuis 1985: chercheur au Research Associate of the National Bureau of Economic Research.
Depuis 1991: chercheur au Centre for Economic Policy Research (Londres).
1997-2001: coéditeur de la Review of Financial Studies.
Depuis 1999: professeur à l'INSEAD (Institut européen d'administration des affaires) et associé à la Wharton School de l'Université de Pennsylvanie.
Depuis 2003, éditeur associé du Journal of Finance.

Zurückhaltung bei Versicherern
Offiziell äußerte sich die Bank nicht zu den Gründen für den Rückzug aus dem Fonds, der 2005 nach eigenen Angaben eine Rendite von rund 14 Prozent erzielte. In informierten Kreisen hieß es, der neue Eigner Unicredit habe nach der HVB-Übernahme entschieden, das Geld abzuziehen. "Wir haben keine neuen Investoren gefunden. Im Moment ist es fast unmöglich, als Einzel-Hedge-Fonds Geld einzusammeln", sagte Neumayer. Die Auflagen für die Investoren seien enorm restriktiv.
Die Investitionen von Versicherern gelten als entscheidend für die Entwicklung der Hedge-Fonds-Branche. Von vielen Versicherern würden die Auflagen der Finanzaufsicht BaFin als hinderlich gesehen, sagte Ulrich Krüger, Leiter Kapitalanlagen beim Gesamtverband der Deutschen Versicherungswirtschaft (GDV). Allein die deutschen Lebensversicherer verfügen laut GDV über ein Anlagevermögen von 650 Mrd. Euro.

    Finanzmärkte sind ein Universum der Ideen. Kaum eine Woche vergeht, ohne dass ein neues, noch ausgefeilteres, zielgenaueres oder auch nur sehr exotisches Produkt auf den Markt kommt: Turbos, Knock-outs, Twin-win- und Chamäleonzertifikate heißen ein paar der jüngsten Erfindungen.
     Nicht immer aber ist Deutschland das Land dieser Ideen. Oft wird nur übernommen, was zuvor auf den großen Plätzen London oder New York reüssierte. So war es auch bei den Hedge-Fonds, denen der damalige Finanzminister Hans Eichel Anfang 2004 die Zulassung erteilte. Der hiesige Finanzplatz wollte sich ein üppiges Stück der Wachstumsbranche sichern.
     Nun zeigt sich, dass eine solche Me-too-Strategie, die nur kopiert statt selbst erfindet, kein Erfolgsgarant ist. Die HypoVereinsbank muss ihren Hedge-Fonds schließen, weil es ihr schlicht nicht gelang, genug Geld einzusammeln. Dafür gibt es eine Reihe von Gründen. Hedge-Fonds kennen viele Menschen hier zu Lande zwar gerüchteweise als "Heuschrecken", aber nicht als Vehikel eigener Vermögensanlage. Andere haben Vorbehalte gegen eine Anlageform, die hohe Rendite verspricht, aber auch entsprechend hohe Risiken hat.
     Zugleich ist der globale Wettbewerb in der Branche hart. Manch ein betuchter Investor trägt sein Geld lieber gleich zu den eingesessenen Experten in London oder New York, die über die Expertise und qualifiziertes Personal verfügen. Und schließlich erschwerte auch die perfektionistische deutsche Politik dem neuen Produkt das Leben: mit weit gehenden Vorschriften zu Transparenz und mehr Regulierung als anderswo. So dürfen Privatanleger in Deutschland allenfalls in Dachfonds, aber nicht in einzelne Hedge-Fonds einzahlen.
     Die deutsche Branche kränkelt also, und die Konsolidierung hat eingesetzt, bevor die Expansion richtig begonnen hat. Eine Katastrophe für den Finanzplatz ist das nicht. Aber Deutschland muss sich damit abfinden, dass Hedge-Fonds ein Geschäftsfeld sind und bleiben, bei denen andere die Sahne abschöpfen.
     Aus dem Flop können die Finanzanbieter und die Politik immerhin etwas lernen. Am erfolgreichsten sind Anlageprodukte, wenn sie spezifische Fähigkeiten der Anbieter nutzen oder spezifische Kundenkreise ansprechen. An vielen Stellen haben deutsche Finanzdienstleister dieses Kunststück vollbracht. Bei verbrieften Derivaten etwa ist Deutschland Weltmarktführer.
     Nichts spricht dagegen, gute Ideen anderer zu übernehmen, wenn sie Erfolg verheißen. Wie in vielen Industriebranchen hat auch in der Finanzwirtschaft der Nachahmer manchmal durchaus die Chance, den Pionier am Markt zu schlagen. Der bessere Weg zum Erfolg ist jedoch oft die eigene Idee.

     The big stakes, big rewards hedge fund industry now manages more than $1,500bn of money worldwide, figures obtained by The Daily Telegraph reveal. Hedge funds managed in Europe alone account for more than $300bn (£172bn) of investments, up almost 18pc in the past year. Two thirds of European hedge funds are managed out of London, representing 12.5pc of the 8,000 worldwide. The figures have been compiled by HedgeFund Intelligence, which publishes EuroHedge, the industry
bible for the European hedge fund markets.
     HFI's estimated figures, up from $1,000bn in 2004, will be finalised in the next issue of the magazine, but they were first revealed yesterday in Paris at an industry-leading summit organised by the magazine. The jump in investment comes despite hedge funds losing favour in the past year as equity markets soared, and despite negative publicity from clampdowns on insider trading.
     Neil Wilson, managing editor, of HFI said: "The industry's been growing up. What used to be a small cottage industry on the side of the financial markets, is now much broader and a mainstream part of the market. "A few years ago, hedge funds were largely the domain of high net worth investors. In the past year, a lot more institutional money has flowed in, including pension funds, endowment funds and corporate money."
     The amount of funds under management by Europe's 1,500 hedge funds includes $28bn raised during 2005 as funds were launched by major players including Marshall Wace, Pelton Partners, and Fulcrum Asset Management.
     Hedge funds, which were once regularly described as loosely regulated vehicles, have been increasingly investing in tighter risk management and compliance systems as the industry faces closer scrutiny from both the Financial Services Authority and America's Securities Exchange Commission.
     This month GLG Partners was fined $750,000 by the FSA for alleged insider trading by its star hedge fund manager Philippe Jabre. The growth in hedge funds has been boosted by a growing number of institutional investors, such as pension funds and insurance companies. However, they prefer to invest in hedge funds that offer lowers returns in exchange for more transparency and less performance volatility.
     A spokesman for the Alternative Investment Management Association said: "The latest figures demonstrate the growing demand for hedge funds from the traditional investment community, and shows the increasing understanding and acceptance of this style of modern investment. She said: "Europe and the UK is showing itself to be at the forefront of the industry."
     EuroHedge data showed that European funds had an average of 8.8pc performance growth during the year after funds under management doubled in 2003 and grew by 50pc in 2004. That compared with 5.8pc performance growth on average for hedge funds managed out of the US, where there is now $850bn of money under control of the largest funds.

Die Gewerkschaftsbank versucht zu beruhigen: Aus den jetzt aufgeflogenen Karibikgeschäften ihrer Tochterfirmen würden keine neuen finanziellen Belastungen entstehen. Experten sehen das anders, die FMA prüft intensiv. Der ÖGB könnte wegen der neuen Troubles bald zum Verkauf der Bawag gezwungen sein.

    Die Bawag beziehungsweise ihre Offshore-Beteiligungen - unter anderem in Liechtenstein und Aguilla - werden von den US-Behörden bisher nicht direkt mit diesen Praktiken in Verbindung gebracht, sie scheinen aber bei den Ermittlungen der Börsenaufsicht SEC in den USA immer wieder auf. Einige dieser "Todesspiralen-Finanzierungen" sind zumindest über Offshore-Fonds im Bereich der Bawag gelaufen.
     Beispielsweise im Fall des texanischen Kleinflugzeugbauers Mooney Aircraft Corporation, der 2001 in Konkurs gegangen war, nachdem der Aktienkurs im Zuge einer PIPE-Finanzierung stark gefallen war. Unmittelbar darauf wurde die Firma günstig übernommen.
     Eingefädelt war die Transaktion von der New Yorker LH Financial Services worden. Dieses Unternehmen im Nahbereich des zusammengebrochenen Brokers Refco war Marktführer im amerikanischen PIPE-Geschäft - und zahlreiche PIPE-Transaktionen aus dem Umfeld der österreichischen Bank waren über dieses Unternehmen gelaufen.
     Amerikanische Quellen, die meinen, die Bawag halte über Offshore-Firmen selbst eine Beteiligung an LH Capital, ließen sich nicht bestätigen.
     Der frühere Mooney-Chef Paul Dopp hatte vor Gericht freilich ausgesagt, er habe damals ein E-Mail eines an der Transaktion beteiligten Managers zu Gesicht bekommen, in dem als Hauptkapitalgeber der PIPE-Finanzierung bei Mooney eine "Bawag Bank of Austria" genannt worden sei.
     Am weitesten hineingeleuchtet haben die Behörden bisher in den sogenannten Fall Sedona: Ein Unternehmen dieses Namens war im Zuge einer PIPE-Finanzierung, bei der massiv "Naked Shot Selling" (der Investor verkauft Aktien, die gar nicht in seinem Besitz stehen, um den Kurs zu drücken) eingesetzt wurde, in den Konkurs getrieben worden.
     Und im "Sedona-Case" gibt es bereits ein Urteil: Eine Rhino Advisers Inc. und deren Chef Thomas Badian waren wegen Einsatz dieser illegalen Praktik zu einer Million Dollar Strafe verurteilt worden. Badian soll sich laut "Time" unterdessen aus den USA zurückgezogen haben - nach Wien, wo er eine Wohnung besitzt.
     Die Trades, die Sedona ruinierten, sind über einen in Panama registrierten und in Zürich ansässigen Fonds namens Amro gelaufen. Aber Rhino hat mit seiner Praxis des "Death Spiraling Financing" nach US-Quellen nicht nur Sedona, sondern zumindest 60 weitere US-Firmen auf dem Gewissen.
     Für die Trades, die teilweise über den Bawag-Partner Refco gelaufen sind, hat Rhino laut US-Quellen nicht nur Amro benutzt, sondern unter anderem auch die beiden Gesellschaften Austost und Celest Trust in Liechtenstein. Beide sind 100-Prozent-Töchter der Bawag.
     Allerdings offenbar mit wenig Personalaufwand: Sie residieren ebenso wie die beiden im Zuge der Refco-Affäre genannten anderen Bawag-nahen Liechtenstein-Gesellschaften Alpha Capital und Austinvest an der Adresse der Trevisa-Treuhandanstalt in der Schaaner Landstraße 8 im kleinen Fürstentum.
     Dass die liechtensteinischen Bawag-Adressen in Rhino-Finanzierungen involviert sind, heißt natürlich nicht, dass sie auch in illegale Tätigkeiten verwickelt waren. Aber das Image, das Bawag-Partner Rhino in den USA genießt, ist zumindest interessant: In Medienberichten hieß es, die Firma sei "auf Todesspiralenfinanzierung spezialisiert", die
     Börsenaufsicht SEC bescheinigte, die Gesellschaft sei "in großem Stil in Shorttrading engagiert". Keine operativen Beziehungen hat die Bawag nach Eigenangaben mehr zu den zumindest sechs Unternehmen in der Offshore-Destination Aguilla, die in den "Phantomanleihen"-Skandal um Refco verwickelt sind. Ob direkte oder indirekte Beteiligungen bestanden oder weiter bestehen, wurde vom Institut nicht mitgeteilt.
     Gerätselt wird weiter über den Sinn der in den vergangenen Tagen hochgekochten Phantombond-Geschichte. Wie berichtet waren in den Refco-Büchern Anleihen über mehr als 500 Mill. Dollar aufgetaucht, für die es in der Konkurssache keine Geschädigten gibt.
     US-Ermittler vermuten, dass die Bonds - ähnlich wie der unter merkwürdigen Umständen von der Bawag gewährte 350-Mill.-Euro-Kredit an Ex-Refco-Chef Bennett - von diesem zur Verschleierung von Verbindlichkeiten benutzt worden sein könnten.
     Bennet hatte Verbindlichkeiten in dieser Höhe in einer komplizierten Konstruktion unter Zuhilfenahme eines Hedgefonds "versteckt", sodass die erst kurz zuvor an die Börse gegangene Gesellschaft finanziell gesünder aussehen sollte als sie tatsächlich war.
     Unmittelbar vor dem Zusammenbruch von Refco hatte Bennett diese Verbindlichkeiten mit dem unterdessen berühmt gewordenen, an einem Wochenende überwiesenen 350 Mill. Euro Kredit abgedeckt.
     Dieses "Last Minute Darlehen" stellt den Löwenanteil der maximal 392 Mill. Euro Belastung, die sich die Gewerkschaftsbank aus der Refco-Pleite erwartet. Aus den PIPE-Finanzierungen ist von der Bank nach Eigenangaben kein Schaden zu befürchten, zumal es sich dabei nicht um Bank-, sondern um Kundengelder gehandelt habe.
     Insider fürchten freilich, dass sich aus den zahlreichen Prozessen, die wegen der Refco-Pleite anstehen, noch unangenehme Situationen für die österreichische Bank ergeben könnten. Vor allem dann, wenn nachgewiesen werden kann, dass Offshore-Beteiligungen in "Todesspiralen-Finanzierungen" involviert waren.

A global economic boom, sharply higher demand, extraordinarily tight supplies and domestic instability in many of the world's top oil-producing countries — in that environment higher oil prices were inevitable.

But crude oil is not merely a physical commodity that fuels the world economy; powers planes, trains and automobiles; heats cities; and provides fuel for electricity. It has also become a valuable financial asset, bought and sold in electronic exchanges by traders around the world. And they, too, have helped push prices higher.

In the latest round of furious buying, hedge funds and other investors have helped propel crude oil prices from around $50 a barrel at the end of 2005 to a record of $75.17 on the New York Mercantile Exchange last week. Back in January 2002, oil was at $18 a barrel.

With gasoline in the United States now costing more than $3 a gallon, high energy prices may be a political liability for the Bush administration. But for outside investors — hedge funds, investment banks, mutual funds and pension funds and the like — the resurgence in the oil market has been a golden opportunity.

"Gold prices don't go up just because jewelers need more gold, they go up because gold is an investment," said Roger Diwan, a partner with PFC Energy, a Washington-based consultant. "The same has happened to oil."

Changes in the way oil is traded have contributed their part as well. On Nymex, oil contracts held mostly by hedge funds — essentially private investment vehicles for the wealthy and institutions, run by traders who share the risks and rewards with their partners — rose above one billion barrels this month, twice the amount held five years ago.

Beyond that, trading has also increased outside official exchanges, including swaps or over-the-counter trades conducted directly between, say, a bank and an airline. And that comes on top of the normal trading long conducted by oil companies, commercial oil brokers or funds held by investment banks.

"Five years ago, our futures exchange was a small group of physical oil players," said Jeffrey Sprecher, the chief executive of Intercontinental Exchange, the Atlanta-based electronic exchange where about half of all oil futures are traded. "Now there are all sorts of new investors in trading commodity futures, much of which is backed by pension fund money."

Such trading is a 24-hour business. And more sophisticated electronic technology allows more money to pour into oil, quicker than ever before, from anywhere in the world.

In the Canary Wharf business district of London, for example, the trading room of Barclays Capital is filled with mostly young men in identical button-down blue shirts, staring intently at banks of computer screens where the prices of petroleum products — crude oil, gasoline, fuel oil, napthene and more — flicker by.

Occasionally a trader breaks from his trance to bark instructions to a floor broker a couple of miles away, delivering the message through a black speaker box. Above them is a television screen, where President Bush this week was telling America to "get off oil."

Experienced oil traders are in heavy demand, and average salary and bonus packages are close to $1 million a year, with top traders earning as much as $10 million.

The rush of new investors into commodities has meant a rash of new clients for banks like Barclays.

Lehman Brothers and Credit Suisse have recently beefed up their oil trading teams to compete with market leaders like Goldman Sachs and Morgan Stanley.

"Clearly the big attraction of commodity markets like oil is that they've been going up," said Marc Stern, the chief investment officer at Bessemer Trust, a New York wealth manager with $45 billion in assets. "Rising prices create interest."

This year alone, oil prices have gained 18 percent; they were up 45 percent in 2005 and 28 percent in 2004, a performance far superior to the Standard & Poor's 500-stock index, whose gains in these years have been in the single digits. And to some extent, the rising price of oil feeds on itself, by encouraging many investors to bet that it is likely to continue doing so.

"The hedge funds have come roaring into the commodities market, and they are willing to take risks," said Brad Hintz, an analyst with Sanford C. Bernstein & Company, an investment firm in New York.

Energy funds make up 5 percent of the global hedge fund business, with about $60 billion in assets, according to Peter C. Fusaro, principal at the Energy Hedge Fund Center, an online research community.

The gains on the oil market have attracted a fresh class of investors: pension funds and mutual funds seeking to diversify their holdings. Their investments have been mostly channeled through a handful of commodity indexes, which have ballooned to $85 billion in a few years, according to Goldman Sachs. Goldman's own index holds more than $55 billion, triple what it was in 2002.

Pension funds have been particularly active in the last year, said Frédéric Lasserre, the head of commodity research at Société Générale in Paris. These investors, seeking to diversify their portfolio, have added to the buying pressure on limited commodity markets.

While all this new money has contributed to higher prices, by some estimates perhaps as much as 10 percent to 20 percent, the frantic trading ensures that even the biggest players — including the major oil companies — cannot significantly distort the market or tilt it artificially in their favor. It also makes oil markets more liquid, meaning a buyer can always find a seller.

"The oil market has been driven by speculators, by hedge funds, by pension funds and by commodity indexes, but the fact of the matter is that it's mostly been driven by the fundamentals," said Craig Pennington, the director of the global energy group at Schroders in London. "Prices are supported by the fact that there is no spare capacity."

The inability to increase output fast enough to keep up with global demand accounts for most of the oil price rise over the last three years, analysts say. And until more investments are completed in oil production and refining, markets will remain on edge, with the slightest bit of bad news likely to push prices up further.

"The reality is that the world has no supply cushion left," said Edward L. Morse, an executive adviser at the Hess Energy Trading Company, a New York oil trading firm.

Political strife and circumstance played major parts as well. A crippling strike in Venezuela's oil industry in 2002, the invasion of Iraq, civil unrest in Nigeria, and last summer's hurricanes in the Gulf of Mexico, among other things, have all contributed to pinching supplies.

"If we didn't have politics," said William Wallace, a trader on the Nymex for Man Financial, "we'd be like corn."

According to Cambridge Energy Research Associates, an energy consulting firm owned by IHS, Iraq is 900,000 barrels a day below its prewar output; Nigeria has shut 530,000 barrels a day; Venezuela is still 400,000 barrels below its prestrike production; and the Gulf of Mexico remains down by 330,000 barrels a day. In all, this amounts to more than two million barrels of disrupted oil, Cambridge Energy estimates.

The latest reason for gains on energy markets is the growing fear that the diplomatic standoff between the Western powers and Iran over nuclear technology will get out of hand.

"All the risk," said Eric Bolling, an independent trader on Nymex, "has been on the upside."

One characteristic of today's futures market is the sharp increase in volatility, which industry insiders largely attribute to hedge funds and other speculators looking for a quick profit.

"It is the case," complained BP's chief executive, Lord Browne, "that the price of oil has gone up while nothing has changed physically."

"The idea that speculators can systematically push the price up or down is wrong," said Robert J. Weiner, a professor of international business at George Washington University and a fellow at Resources for the Future, a nonpartisan think tank. "But they can make it more volatile. They can't raise water levels but they can create waves."

Not all bets have turned out to be profitable. Veteran commodity market traders have been stymied by the high prices of oil, which have exceeded their expectations, and many now predict a steep decline in prices is ahead. But they have been wrong so far.

"We found the last 18 months difficult," said Russell Newton, director of Global Advisors, a New York and London hedge fund with $400 million in assets under management that had a down year in 2005.

In one often cited example, the Citadel Investment Group, a Chicago-based hedge fund, lost tens of millions of dollars after betting oil prices would fall just before Hurricane Katrina struck.

"Everybody is jumping into commodities, and there is a log of cash chasing oil," said Philip K. Verleger Jr., a consultant and a former senior adviser on energy policy at the Treasury Department.

The spike in copper prices over recent weeks has left a group of banks and operators on the London Metal Exchange (LME) nursing vast losses, raising concerns about the stability of the commodities market. Simon Heale unexpectedly said that he would be stepping down by the end of the year.

The banks have been caught out by a sudden widening in the gap between the price of three-month futures and that of long-term futures, for December 2010 or April 2011. "The dramatic differential we have seen over the past six weeks has cost them a huge amount of money," said a market source. "The bigger players can absorb the losses but smaller operators have nowhere to hide."

Copper surged this week to an all-time high of $8,875 a tonne, rising almost 10pc on Thursday. Yet futures prices for April 2011 are just $3,778 a tonne. Barclays Capital denied reports that it faced losses of £500m on copper trades, saying that it would have issued a statement if such claims were true.

Banks help to finance the LME's $3,000bn trades each year, often taking on long-term hedges from metal producers, which they cover by selling short-term futures. If the two suddenly diverge, it plays havoc with their books.

Adding to the intrigue, the LME's chief executive, Simon Heale, unexpectedly said on Thursday that he would be stepping down by the end of the year. His spokesman denied that there was any link to the metals mayhem this week, insisting that Mr Heale wished to spend more time with his family.

Copper has doubled in price this year even though industrial demand is flat. "This is fairyland," said Richard Elman, head of the Noble Group. "We have never seen such a disconnect between reality and pricing of raw materials. The long-term story is sound but the short-term froth is patently frightening."

William Adams, an analyst at BaseMetals.com, said demand for copper tubes was collapsing as producers switched to PVC plastics. The market in Germany has halved from 90,000 to 45,000 tonnes. "There's a very rapid switch from copper. When it turns, copper could easily drop $1,000 a tonne in one day," he said.

David Threlkeld, a veteran copper trader, said the market had been "out of control" for months, allowing speculators to run roughshod over industrial producers and users.

"The LME has been seduced by hedge funds, [which have] pushed prices to levels unsupported by fundamentals. There's a vacuum below and the crash could set off a chain of margin calls running through the whole commodities sector. We've got a crisis on our hands and it is a lot bigger than copper," he said.

The risk of defaults was hanging over the London Metal Exchange last night after a clutch of clients failed to meet margin calls on losing copper trades, leaving brokers struggling frantically to match their books.

The liquidity crunch follows another day of wild gyrations at the exchange, where copper, aluminium, zinc and lead all tumbled on bad US inflation data after failing to conquer new highs.

Copper fell 3.3pc to $8,080 a tonne in late trading. "The hedge books of the banks are seriously underwater on copper, but apart from that there are now brokers in trouble because clients can't meet the margin payments," said a market source.

LME brokers are liable for the margin calls of their clients, who are given 24 hours to stump up the cash. "Some of the wire cable manufacturers and industrial users can't meet payments because of cash flow problems, so the brokers are left holding the bag," he said. He added that the banks were bleeding heavily because of a mismatch between their short-term and long-term futures contracts.

The market reached fever point late last week with all-time highs across the spectrum of base metals, led by an explosive spike in copper to almost $8,900 a tonne - up 170pc in a year.

Speculation by hedge funds prompted LCH.Clearnet to raise margin calls 71pc to $25,000 per 25-tonne lot earlier this week, after doubling them just eight days earlier. LCH.Clearnet said that none of its 39 LME members had missed payments, but it is not responsible for monitoring defaults by broker clients. Moreover, many smaller players are outside the Clearnet system.

The LME said all its members were meeting obligations and are in "good standing". "There is no chance of a member defaulting because systemic risk is managed through very sophisticated mechanisms," it said.

Yes, annual hedge fund investment returns for the past few years are only half of what they were during the 1990s. And sure, the proliferation of new funds has made it difficult for managers to rack up big gains in most hedge fund strategies. But when it comes to pure wealth creation — arguably the biggest motivation for the majority of hedge fund managers — times have never been better. Thanks to the power of hedge fund math, driven by management fees and performance incentives, more managers are making more money today than ever before, as evidenced by our fifth annual survey of the biggest earners.

One year ago Edward Lampert of ESL Investments made headlines when he became the first manager in our survey to earn $1 billion in a year. This time there are two who break the

billion-dollar barrier: James Simons of Renaissance Technologies Corp. and BP Capital Management’s T. Boone Pickens. In 2005 math whiz Simons, we calculate, earned a staggering $1.5 billion, edging out oil tycoon Pickens, who took home an equally astounding $1.4 billion from two hedge funds he quietly launched ten years ago. Although Lampert saw his earnings cut by more than half in 2005, he still made a cool $425 million, good enough for sixth place on our list. Rounding out the top five are three longtime managers: Soros Fund Management’s George Soros, $840 million; SAC Capital Advisors’ Steven Cohen, $550 million; and Tudor Investment Corp.’s Paul Tudor Jones II, $500 million.

This year our list of the top 25 money earners actually includes 26 managers, thanks to a tie at No. 25 between William Browder of Hermitage Capital Management and Marc Lasry of Avenue Capital Group. Browder is one of eight managers who appear for the first time. (John Griffin of Blue Ridge Capital, No. 18 with $175 million, returns to the list after a two-year absence.)

Other newcomers are Pickens, David Shaw of D.E. Shaw & Co. (No. 9 with $340 million); Timothy Barakett and David Slager of Atticus Capital (No. 14 and No. 20, respectively, with $200 million and $150 million); William von Mueffling of Cantillon Capital Management, who is tied with Barakett at No. 14 with $200 million; and Noam Gottesman and Pierre Lagrange of London-based GLG Partners, both tied with Slager at No. 20 with $150 million.

One thing that never seems to change for this exclusive club: The cost of admission keeps going up. A manager had to earn at least $130 million in 2005 to qualify for a place among the top 25 money earners, compared with $100 million in last year’s survey and just $30 million in 2001 and 2002. The 26 managers on the list made, on average, $363 million in 2005, a 45 percent jump from the $251 million the top 25 earned in 2004. The average, of course, got a boost from the billion-dollar boys, Simons and Pickens. But the median earnings also grew, jumping by a third, from $153 million in 2004 to $205 million last year.

Two managers who made the list last year — Thomas Steyer of Farallon Capital Management and Leon Cooperman of Omega Advisors — are noticeably absent this time. Both Steyer and Cooperman fail to qualify despite earning at least $100 million, an amount that would have landed them among the top ten managers just three years earlier.

This swelling of personal gains has made many hedge fund managers enormously wealthy. By our estimates, at least 13 of the managers on our list this year are billionaires — Simons; Pickens; Soros; Cohen; Jones; Lampert; Shaw; Bruce Kovner of Caxton Associates and David Tepper of Appaloosa Management (tied at No. 7); Israel Englander of Millennium Partners (No. 11); Kenneth Griffin of Citadel Investment Group (No. 13); James Pallotta of Tudor Investment Corp. (tied for No. 14), and Louis Bacon of Moore Capital Management (No. 19).

Investors have long insisted that hedge fund managers have a substantial percentage of their net worth tied up in their own funds to ensure that the interests of all parties are aligned. Now, as hedge fund assets have grown, and managers’ assets in their own funds have grown with them, managers no longer need to put up high returns to make a lot of money. Six managers this year make the top 25 despite generating single-digit returns: Caxton’s Kovner, Citadel’s Griffin, ESL’s Lampert, Tudor’s Pallotta, Raymond Dalio of Bridgewater Associates and Och-Ziff Capital Management Group’s Daniel Och.

“Clearly, there is a disconnect between pay and performance,” says Antoine Bernheim, publisher of hedgefundnews.com and president of Dome Capital Management in New York, which has been advising European institutional and private investors on their hedge fund portfolios since 1984. “People are getting paid extraordinary amounts of money for performance that is mundane.”

As hedge funds have grown, management fees — which mostly range between 1 percent and 5 percent, depending on the manager — have become an increasingly important piece of the economic equation. Ten years ago a $10 billion hedge fund was rare; today there are 20 managers who run at least that much in assets.

“You can make T-bill returns and be just fine because you have a 2 percent management fee,” says Mark Yusko, president and chief investment officer of North Carolina–based investment advisory firm Morgan Creek Capital Management.

Of course, some managers, such as Jeffrey Gendell of Tontine Associates, have become very wealthy because of good old-fashioned performance. Gendell made $215 million in 2005 thanks to a 38 percent net return, which followed 100 percent-plus returns in 2003 and 2004.

The billions and billions of dollars being accumulated by hedge fund managers is a concern for investors. “The wealth creates the potential for major distractions for all managers who are successful,” says Peter Adamson, chief investment officer for the Los Angeles–based Broad foundations and Eli Broad family office, which have invested more than $1 billion in hedge funds. “Wealth has the potential to have a dulling influence on a manager’s drive,” adds Morgan Creek’s Yusko.

Still, investors like Yusko acknowledge that money is the ultimate yardstick that the top hedge fund managers use to measure their success.

“In every profession, whether it is a football coach or a surgeon, the best person makes the most money,” he explains. “The same is true with investment managers. The great ones are hedge fund managers.”

JAMES Simons’ legend grows apace with his portfolio and his philanthropy. Last year the veteran Long Island hedge fund manager’s quant-driven Medallion hedge fund returned 29.5 percent net. That was all the more remarkable given the $5.3 billion fund’s 5 percent management fee and 44 percent performance fee. (The gross return was nearly 60 percent.) Even so, Medallion fell short of its roughly 34 percent annualized net return since its 1988 inception.

The odds are pretty good that Simons will figure out how to make up that shortfall. Many hedge funds are run by teams of pointy-headed rocket scientists, but Renaissance Technologies Corp. might be able to run its own space program. The 68-year-old Simons, who has a Ph.D. in mathematics from the University of California at Berkeley and has taught at Massachusetts Institute of Technology and Harvard University, has packed his East Setauket, New York, enterprise with math and computer whizzes. These quantitative specialists use arcane programs to trade the globe’s most liquid securities rapidly and frequently, using lots of leverage.

Nonetheless, no program can entirely capture the markets’ vicissitudes. The firm’s new $3.4 billion Renaissance Institutional Equity Fund, which Simons says in an investor document has the capacity to handle as much as $100 billion in assets, got off to a slow start last year, rising just 5 percent from its August 1 inception through year-end. RIEF’s $20 million minimum investment gears it to institutions; unlike the shorter-horizon Medallion, the new fund takes mostly long positions and holds them for relatively protracted periods. RIEF’s gain in assets came as Simons moved Medallion ever closer to being a closed portfolio for himself, his friends and his employees.

Always generous, Simons is devoting a large amount of time and money to philanthropies near and dear to him. He has donated $38 million to research the cause of autism, with which his teenage daughter was diagnosed when she was young. He and his wife, Marilyn, are said to be prepared to spend a further $100 million on promising autism studies.

Early this year Simons, who once chaired the math department at the State University of New York at Stony Brook, gave $13 million to nearby Brookhaven National Laboratory so that it could keep running its Relativistic Heavy Ion Collider, the only device in the world that can mimic the “Big Bang” in the lab. Simons, along with a large number of other managers on our list of top money earners, is supporting New York State Attorney General Eliot Spitzer’s bid to become governor of New York.

The Robin Hood Foundation’s annual benefit often brings out the quirkier sides of Wall Streeters along with their checkbooks. For last year’s gala Paul Tudor Jones II, a co-founder of the charity, dressed as Star Wars’ Darth Vader. “This is what will happen to you,” Jones, who is 51, warned traders under 40, according to those who were present.

Going over to the dark side hasn’t hurt his performance. Since opening Tudor Investment Corp. in 1980, Jones has never had a down year. In 2005 the firm’s $5.3 billion flagship Tudor BVI Global Fund climbed 14.7 percent net of its 4 percent management fee and 23 percent performance fee, marking its fifth year in a row of double-digit net returns. Most of the gains came from global equities, including macro bets in Japan, energy and emerging markets. (James Pallotta, No. 14, oversees Tudor’s Raptor funds and himself earned $200 million.)

Jones, whose Greenwich, Connecticut–based firm manages $12.7 billion in all, is a staunch supporter of wildlife conservation. He owns Grumeti Reserves in Tanzania’s Western Serengeti and was recently lauded by the East African country’s Parliament for not permitting hunting in his reserve. He has given money to Democrats in key races in 2006, backing New York State Attorney General Eliot Spitzer’s run for the governorship of New York.

Time magazine, in its May 6 issue featuring “the lives and ideas of the world’s most influential people,” poses this question about one of its 100 profile subjects: Is Eddie Lampert the best investor on Wall Street?

Lampert’s fund was up just 9 percent in 2005, chiefly because of a sizable cash position. As a result, he wound up taking home about $600 million less than the more than $1 billion he pocketed in 2004, when he was No. 1 on our list. All the same, Lampert’s investors have little to bellyache about. Even with last year’s listless showing, ESL Investments has compounded at about 28 percent a year, on average, since the 43-year-old launched it in 1988 at 26, fresh out of Goldman, Sachs & Co.’s risk-arbitrage group.

ESL’s prospects now depend upon the health of mass-market retailer Sears Holdings Corp. Since Lampert took a recapitalized Kmart public in the spring of 2003, then merged it with Sears, Roebuck & Co. in mid-2005, his investment has soared tenfold. The company accounts for two thirds of Greenwich, Connecticut–based ESL’s $11 billion equity portfolio. Sears’ shares finished last year up 16.8 percent. ESL’s other two big positions: a $1.7 billion stake in car retailer AutoNation, whose shares rose 13 percent in 2005, and a $2 billion investment in parts supplier AutoZone, which was flat.

One question on the minds of Sears shareholders is what Lampert, who is chairman, plans to do with the $4.4 billion sitting in its till. At Sears’ annual meeting in April, he hinted at additional acquisitions. Meanwhile, Lampert is battling New York–based hedge fund Pershing Square Capital Management for control of Sears’ Canadian operation (Sears Holdings owns a majority stake).

For an activist investor, Timothy Barakett kept a low profile after launching Atticus Capital in 1995, at age 26. That changed last year when Atticus and the Children’s Investment Fund U.K., a London hedge fund, teamed up to block Deutsche Bšrse’s $2.5 billion bid for the London Stock Exchange. They proposed instead that the German market issue a special dividend or buy back shares. Six months later Deutsche Bšrse’s CEO, Werner Seifert, quit, and the LSE has become the object of ardent courtship by both the Nasdaq Stock Market and the New York Stock Exchange.

Then the battle-hardened Atticus turned on another exchange. Earlier this year the New York firm and accounts it advises amassed a 9.1 percent stake in Euronext and urged that the Paris-based electronic exchange combine with Deutsche Bšrse.

In February, Barakett, who makes his debut on our list of top money earners tied for No. 14, fired off a letter to Arcelor CEO Guy DollŽ expressing his extreme disappointment that the Luxembourg-based steelmaker, in which Atticus has a 1.3 percent stake, wasn’t paying more attention to a tender offer from Mittal Steel Co., also based in Luxembourg.

Barakett, who holds a BA in economics from Harvard University and an MBA from the Harvard Business School, does not make his rather handsome living just from badgering CEOs. His Atticus Global fund was up a net 22 percent in 2005, and his Atticus European fund — managed by David Slager, who is tied for No. 20 — surged 62 percent. On a capital-weighted basis, Atticus’s funds were up 45 percent, on average. Little surprise, then, that the firm’s assets more than doubled in 2005, to $9.2 billion. That must please Barakett, but it is also gratifying to Atticus vice chairman Nathaniel Rothschild, son of Lord Jacob Rothschild. The younger Rothschild earned about $80 million last year, falling short of the cutoff for our list.

Daniel Loeb puts the “pistol” in epistolary. The Third Point founder’s letters to CEOs can be blunt, as in a blunt instrument. In one guided missive in February 2005, he wrote Irik Sevin, then CEO of Stamford, Connecticut– based heating-oil distributor Star Gas Partners: “Sadly, your ineptitude is not limited to your failure to communicate with bond and unit holders. A review of your record reveals years of value destruction and strategic blunders which have led us to dub you one of the most dangerous and incompetent executives in America.” Three weeks later Sevin resigned.

But for all his bluster, the 44-year-old Loeb dedicates less than 10 percent of his New York firm’s $3.8 billion in assets to shareholder-activism strategies. Instead, the 1984 Columbia University economics grad is a traditional value and event-driven investor. Last year Loeb cashed in on surging energy prices. He racked up big gains on two Houston-based energy companies — 140 percent on McDermott International and roughly 50 percent on Plains Exploration & Production Co. His return for the year: 18 percent net.

In a more serendipitous investment coup, Loeb made a 500 percent profit in 2005 by selling a 1984 Martin Kippenberger painting that he had held for three years to advertising figure Charles Saatchi for $1.5 million. The hedge fund manager owns more than 30 works by the German artist, whose credo was to shock and disturb people to expand their perception, not unlike Loeb.
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    NIMBLENESS and creativity are qualities rarely ascribed either to America's financial regulators or to Congress. Perhaps that is one reason why both groups are fumbling over how to deal with hedge funds, which typically exhibit both in abundance. These lightly regulated pools of private capital employ an array of complex trades, frequently shifting strategies and, in theory, generating above-average returns. They are growing fast: there are now more than 8,000 hedge funds, managing over $1 trillion in capital.
    Such dynamism seemed remote indeed on June 23rd, when a federal appeals-court panel in Washington, DC, ruled that the Securities and Exchange Commission (SEC) had clumsily passed an "arbitrary" rule in an effort to bring hedge funds under its scrutiny (see page 70). A few days later Congress held (yet more) hearings on hedge funds amid renewed calls for oversight of the industry. The court's decision on the SEC is as welcome as Congress's attentions are to be regretted.
    The argument for more regulation is twofold. First, nowadays it is not only a few aficionados of the investment world who are exposed to them but a growing number of people-either directly, if they are rich enough, or through their pension funds. Second, some hedge funds are so large that a big one's failure could threaten the financial System.
    But if people don't want to accept the downside of risk, they shouldn't invest in risky businesses. As to pension funds, managers and trustees should look at the risks involved in these investments carefully: hedge funds are not for every-body. It is the second argument that makes the stronger case for regulation: hedge funds' power means the public has an interest in regulators keeping an eye on them.
    However, there are various ways of doing that. America tends to take a rules-based approach to financial regulation. It teils firms what they can and cannot do. Britain, by contrast, tends to set broad principles: it checks out hedge funds (just like mutual funds) before they set up in business, then requires them, for instance, to operate with "integrity". In a world äs fast-moving äs finance, a principles-based System allows regulators a flexibility that a rules-based approach does not.
    The regulation that the court rejected is a case in point. It called for hedge funds with more than 15 American Investors
to register with the SEC by February ist this year and undergo occasional checks. Although smaller American funds and those with Investment "lock-up" periods of more than two years were exempt, foreign-based hedge funds with American Investors were not. This not only rankled with foreign fund managers, who had already been cleared by, say, Britain's Financial Services Authority, but also had the perverse effect of leading some funds on both sides of the Atlantic to extend their Investment lock-up requirements, arguably to the detriment of investors.
    Shackling funds with rules dreamt up after a bunch of Wall Street scandals could stifle a vibrant industry that has helped spread portfolio risk. Regulators need not rules but intelligence. The current System, which allows regulators to supervise hedge funds through prime brokers, is a good foundation.
    Prime brokers, typically arms of (regulated) investment banks, provide hedge funds with a range of Services, including securities lending, leveraged-trade transactions, and cash management. They are close to the market, so they can keep regulators informed; and, because their money is at risk, have an interest in keeping abreast of what hedge funds are doing. A few high-profile fund blow-ups have already prompted prime brokers to tighten their practices. America's regulators would do best to rely on the self-interest of, and intelligence from, prime brokers; and to move towards the British approach of abjuring detailed rules and relying on principles.
    Whatever happens, some hedge funds are bound to go bust. That's healthy, and does not argue for more regulation. Hedge funds are one of the most dynamic forces in finance. They should generally be left alone. •

The European Union's $325bn hedge fund industry should be free to offer its services across different member states and face fewer obstacles when marketing its products to investors, according to a report released by the European Commission on Tuesday.
The paper offers broad support to an industry that has often been the target of attacks by national politicians. It urges policymakers and regulators in the EU not to burden hedge funds with additional regulation, and actually calls for the abolition of existing rules that restrict investor access to such funds.

    Europas Hedge-Fonds-Industrie sollte weniger Beschränkungen unterliegen. Das fordert eine hochrangige Expertengruppe, die EU-Binnenmarktkommissar Charlie McCreevy beim künftigen Umgang mit der 325 Mrd. $ schweren europäischen Industrie berät.
    In einem Papier, das am Dienstag in Brüssel vorgestellt wird, der FTD aber bereits vorab vorlag, fordern die Experten etwa, Barrieren zu beseitigten, die die Industrie bisher hindern, ihre Produkte grenzübergreifend anzubieten. Eine Regulierung von Hedge-Fonds lehnt die Gruppe ab.
    Die Experten stellen sich damit gegen den Trend. Eine Reihe internationaler Institutionen betrachtet das Wachstum der Hedge-Fonds-Branche mit Sorge. Die Europäische Zentralbank etwa warnte erst kürzlich, der Kollaps eines oder mehrerer Fonds könne die Stabilität des Weltfinanzsystems gefährden.
    Für Investoren soll es nach der Forderung der Experten leichter sein, Geld in Hedge-Fonds anzulegen. Unter anderem wollen sie Hedge-Fonds stärker für Privatkunden öffnen. Institutionelle Anleger sollen keinen Obergrenzen für ihre Investitionen mehr unterliegen. "Diese Anpassungen würden die weitere erfolgreiche Entwicklung des Geschäfts erleichtern, ohne regulatorische Ziele wie den Schutz von Privatkunden oder die Marktstabilität zu gefährden", heißt es im dem Bericht. Die 16 Experten, bei Finanzkonzernen wie Goldman Sachs, Allianz und Axa für Hedge-Fonds verantwortlich, haben den Bericht unter
Führung der EU-Kommission erarbeitet.

EU lehnt Regulierung ab
    Die Empfehlungen der Experten werden in ein Strategiepapier zur Investmentbranche einfließen, das die Kommission im Herbst vorlegen will. McCreevy hat bereits klargestellt, dass er eine Regulierung von Hedge-Fonds ablehnt. Die Politik der Kommission dürfte sich nun in eine eher marktfreundliche Richtung bewegen.
    Institutionelle Anleger, insbesondere Versicherer, dürfen in einigen EU-Staaten nur sehr wenig in Hedge-Fonds anlegen. Diese Obergrenzen, kritisieren die Experten, wichen voneinander ab und seien willkürlich. Sie sollten daher beseitigt werden. Institutionelle Anleger sollten sich lediglich an das Prinzip einer "vernünftigen" Anlage halten. Die neuen Eigenkapitalregeln für Banken (Basel II) sowie Versicherer (Solvency II) sollten zudem so angepasst werden, dass die Unternehmen nicht daran gehindert werden, in Hedge-Fonds zu investieren.
    Bisher können Versicherer in Deutschland 35 Prozent der Kapitalanlagen in Risikokapitalanlagen wie Aktien oder Hedge-Fonds investieren. Sie schöpfen dies aber bei weitem nicht aus: 2005 hatte die Branche 15,9 Prozent so angelegt. Davon machten Hedge-Fonds nach Angaben der Finanzaufsicht BaFin 4,6 Mrd. Euro oder 0,5 Prozentpunkte aus.
    Die Experten fordern zudem eine Debatte über einen verstärkten Zugang für Privatkunden zu Hedge-Fonds: "Das sollte nicht länger ein Tabu sein." Um die Anleger zu schützen, sollten nicht Produkte oder der Vertrieb reguliert werden. Vielmehr schlagen die Experten unter anderem Mindestschwellen für zulässige Investitionen vor. Sie könnten etwa bei 50.000 Euro liegen.

How did the size of the hedge-fund industry double overnight? Until a few weeks ago, the industry had about $1 trillion in assets world-wide, according to a consensus of estimates by academics and consultants. Then, on June 23, the media began reporting that hedge funds had more than $2 trillion.

The confusion began when a federal appeals court tossed out a rule requiring hedge funds to register with the Securities and Exchange Commission. Swamped with queries, the SEC tallied the assets reported by hedge-fund managers who had registered. The figure -- a whopping $2.4 trillion -- was reported by The Wall Street Journal, the New York Times, National Public Radio and other news outlets. (See related correction.)

The odd thing is that the SEC itself had long been using a much smaller number. In congressional testimony just a few weeks earlier, the agency's director of investor education, Susan Ferris Wyderko, said the industry has $1.2 trillion in assets -- "a remarkable growth of almost 3,000% in the last 16 years." She attributed the figure to Hedge Fund Research of Chicago.

So, where did the other $1.2 trillion come from? "We're still trying to figure that out," fumes Josh Rosenberg, president of Hedge Fund Research. "We'd like the SEC to cease and desist from using the new figure."

John Nester, SEC's head of public relations, says the SEC figure is high because it "includes a lot of double counting." About 2,500 registered investment advisers claim to collectively have $2.4 trillion in more than 13,000 hedge funds. But a lot of that money overlaps, Mr. Nester says. Say a fund that invests in hedge funds has $1 billion. It would report those assets. Then, the hedge funds where that $1 billion is invested would report that money again. "If you add up the assets hedge-fund managers report, it comes out to $2.4 trillion, but that doesn't mean there's $2.4 trillion in the pot," Mr. Nester says. "If you call this a '$2.4 trillion hedge-fund industry,' that would not be correct. If you said 'the $1.2 trillion industry,' that would be correct."

    A LOT OF what is said about hedge funds and derivatives is nonsense. At one extreme, hedge funds are attacked as dangerously unregulated cabals wielding newfangled instruments of finance like unguided missiles aimed at the heart of world capitalism. At the other, hedge funds are celebrated äs the greatest market development since mutual funds and derivatives the best innovation since insurance was created.
    The proliferation of investment channels outside of traditional banks and bonds - hedge funds - and of financial instruments that, for instance, can allow a bank to lend to General Motors Corp, and lay off the risk of bankruptcy on some high roller - derivatives - add to the stability of the economy and reduce the frequency of crises. There are now mechanisms to insure against almost any risk and someone willing to seil the insurance (or, depending on how you look at it, place a bet). These innovations may actually reduce market volatility if they give big bucks to nimble investors who search constantly for anomalies in market prices and eagerly buy what's out of favor and sell what's in favor.
    But if there is a financial earthquake, will these new institutions and mechanisms turn it into a tsunami? Will we have fewer crises, but bigger ones, the sort that jar whole economies, not just shake up a few greedy, leveraged investors? It's a good time for such questions. Memories have faded of the 1987 stock-market crash and the 1998 bond-market paralysis that was set off by Russia's default and the collapse of hedge-fund Long Term Capital Management. That breeds complacency. A long period of global easy money and low interest rates is ending, a change in the investing environment that often triggers problems.
    A Century ago, a big financial crisis meant bank failures. That's not today's worry. Commercial banks are in better financial health than they were 15 years ago, and there's a global regulatory apparatus to supervise them. But banks represent a shrinking slice of global finance. If a bank won't lend, someone else will. The action is in hedge funds, trading desks of big investment banks and increasingly venturesome insurance companies, pension funds and endowments, many of which see traditional stocks and bonds as passé.

    ONE BIG WORRY is that these players, some of whom are highly leveraged, may bolt for the exits at the same moment if something goes awry. And, if it turns out that many of them have made similar bets - buying high-yield Turkish debt and counting on a stable currency, for instance - they might all try to get through the same door at the same time. Prices fall as buyers prove scarce. That exacerbates the stampede. And because the investors are leveraged, they have to sell still more holdings, and the panic spills over to other markets.
    In some ways, it's a classic financial panic; in others, it could be more severe. Players big and small may discover a few things. One: Their positions aren't as easy to liquidate as they think. Two: Some are mispricing risk, as the Jargon goes, essentially selling insurance but not charging enough. Three: Some elaborate computer model for valuing a complex custom-made financial trade is wrong. (In all the slicing and dicing of loans today, banks and brokers can put different prices on the same transaction.) Four: Sloppy paperwork makes it hard to figure out who owes what to whom.
    For better or worse, governments aren't doing much to address these Problems in advance. They are particularly poorly suited for a world in which regulatory authority stops at national boundaries, and in which traditional banks aren't the problem. Among far-sighted market players, those who see the Potential for problems, the urge to compete for business can overwhelm sound instincts and good judgment. It's hard to set tougher terms for doing a deal than one's competitors.
    Government can play a role here, even without new rules. Prodded by a current and a past president of the Federal Reserve Bank of New York - Timothy Geithner and Gerald Corrigan - big firms are cleaning up the back-office derivatives mess that would be a nightmare in a crisis because players couldn't be sure who owed whom what. In September 2005, there were 97,000 unconfirmed trades older than 30 days; yesterday, the industry said it had cut that to fewer than 19,400. Mr. Geithner also is giving a "be very careful" sermon, urging lenders to take "a cold, hard look at financing conditions and margin practice" before lending to hedge funds and others who deal in the unregulated parts of the derivatives market.
    The resiliency of financial markets and the global economy has been impressive and encouraging. Financial innovation deserves some of the credit. But as it says in the fine print on prospectuses: Past performance is no guarantee of future results.

Mitte September bekommt der Tourismusbeauftragte der Bundesregierung, Ernst Hinsken (CSU), seltenen Besuch. Angemeldet zum Rapport haben sich die Chefs des größten deutschen Autobahnraststättenbetreibers Tank & Rast. Der Eigentümer ihres Unternehmens, die britische Beteiligungsgesellschaft Terra Firma, hatte Tank & Rast so hohe Schulden aufgebürdet, dass schon die Pächter der Raststätten darunter leiden. Hinsken ist gar nicht glücklich.

Anlass zu solchen Verstimmungen dürfte es bald öfter geben. Denn die Methoden, derer sich einige Fonds im Umgang mit den von ihnen übernommenen Firmen bedienen, werden zunehmend rabiater. Weil immer mehr Geld in sie strömt, steigen die Private-Equity-Firmen mittlerweile für Summen bei Unternehmen ein, die noch vor kurzem kaum vorstellbar waren. Um dabei auf ihre angepeilten Renditen zu kommen, müssen sie den Zielfirmen gewaltige Schulden aufbürden, die diese immer öfter nicht mehr bedienen können. Gut anderthalb Jahre nach Vizekanzler Franz Münteferings Attacke auf angebliche "Heuschrecken", die deutsche Unternehmen kahlfräßen und weiterzögen, benehmen sich manche Fonds nun tatsächlich genau so.

Zumindest weisen die Zahlen in diese Richtung. Denn da das Angebot mit der Geldschwemme nicht mit wächst, steigen die Preise. Mittlerweile zahlen Fonds bis zu 20 Prozent mehr für eine Übernahme, als das Unternehmen nach gängigen Bilanzmethoden wert ist. Um da noch auf die den Investoren versprochenen Renditen von gut 20 Prozent zu kommen, müssen sich die PE-Firmen auf Tricks verlegen.

Zum einen werden die Kaufpreise zu einem immer höheren Anteil auf Pump finanziert, den das übernommene Unternehmen dann verbuchen muss. Nach einer Untersuchung der renommierten Rating-Agentur Standard & Poor's (S&P) hat der durchschnittliche Eigenkapitalanteil beim Firmenkauf von knapp 39 Prozent 2004 auf nur noch gut 31 Prozent abgenommen. Den Kauf des dänischen Telekomriesen TDC Ende Januar für knapp 13 Milliarden Euro etwa finanzierten die Fonds Apax, Blackstone, KKR, Permira und Providence zu 86 Prozent mit Krediten, die TDC zurückzahlt.

"Ein solch hoher Verschuldungsgrad ist kein Einzelfall", sagt Hans Albrecht, Chef der PE-Firma Nordwind. Und besonders düster sieht es in Deutschland aus. Hier lag der Eigenkapitalanteil 2005 mit nur noch 28,1 Prozent nach Schweden europaweit am zweitniedrigsten.

Zunehmend finanzieren Investoren ihren Gewinn auch direkt aus den Schulden der Übernahmeziele. Durch sogenannte Rekapitalisierungen werden den Firmen Kredite aufgebrummt, von denen sie selbst nichts haben. Terra Firma etwa hat eine Ausschüttung in Höhe von 400 Millionen Euro an ihre Geldgeber dadurch finanziert, dass der Fonds die Schuldenlast von Tank & Rast einfach um ein Drittel auf 1,2 Milliarden Euro erhöhte. "Schon während der Haltedauer fließt so immer häufiger der zwei- oder dreifache Einsatz in den Fonds zurück", sagt Schwanitz. Allein 2005 haben Finanzinvestoren laut S&P im
Schnitt das 1,3fache des beim Kauf eingesetzten Eigenkapitals aus ihren Firmen geholt. 2004 waren es "nur" zwei Drittel.

Richtig problematisch werden solche Methoden, wenn das Übernahmeziel seine Kredite nicht mehr bedienen kann. Laut einer weiteren S&P-Studie ist die Insolvenzquote bei solchen Methoden ausgesetzten Firmen 2005 auf sechs Prozent und damit das Vierfache des Normalwerts gestiegen.

In einem vertraulichen Papier warnt eine große Investmentbank bereits, dass immer mehr Firmen ihre Kreditbedingungen nicht mehr einhalten können. Als Beleg dient eine Auswahl von knapp zwei Dutzend Firmen, darunter der deutsche Badarmaturenhersteller Grohe, der im letzten Jahr von TPG gekauft worden war. Laut TPG führte ein Umsatzeinbruch im Deutschlandgeschäft zu den Schwierigkeiten. "Unter diesen Bedingungen kann ein kleiner volkswirtschaftlicher Schnupfen für das Unternehmen schnell zu einem ernsten Problem werden", warnt Peter Schwanitz, Übernahmespezialist beim Münchner
Dachfonds VCM.

Aber auch zu Profit. In London richtet die Investmentfirma Alchemy derzeit erstmals einen Spezialfonds für faule Kredite aus fehlgeschlagenen Private-Equity-Investments ein. Die Nachfrage soll enorm sein.

In the annals of hedge-fund collapses, Sylvester Stallone is among lucky investors who walked away unscathed -- or so it seemed. In 1997, the actor invested $2.5 million in a private investment partnership called Lipper Convertibles. Four years later, with his statements showing the investment had swelled to about $3.8 million, he cashed out. Fellow actor John Cusack also walked away with big gains, as did former New York City Mayor Ed Koch and a trust fund for the children of investor Henry Kravis. Now, they are all being sued to give money back.

What none realized, according to their lawyers, was that Lipper never made all that money. A portfolio manager had inflated profits by at least 40%, Lipper discovered in 2002. "We want all the money to be put back in the pool, so we can divvy it up equitably among all the partners," says Thomas Dubbs, an attorney representing the federal trustee overseeing Lipper. (The hedge fund is unrelated to Lipper Inc., the mutual-fund data firm, which is part of Reuters Group PLC.)

In lawsuits filed in recent months in New York state court in Manhattan, the trustee, Richard Williamson, charges the investors who got out with "unjust enrichment." He wants them to return more than $100 million, including $1.3 million plus interest from Mr. Stallone alone. Messrs. Stallone and Cusack, in court documents, say they were unaware of the fraud and didn't
harm fellow investors. In an interview, Mr. Koch, who now works as an attorney at a private firm, says he intends to keep his profits, which amount to about $1 million, including interest. "It's just wrong," he says.

The battle highlights a trend emerging from the boom in hedge funds, which now control assets of more than $1 trillion for wealthy investors and institutions. In the wake of some failures, those investors who lost money are chasing those who cashed out. However, there is little precedent in terms of applying this legal argument to failed hedge funds. As a result, it remains to be seen whether the new cases have any success.

A trustee liquidating Bayou Management LLC, a failed Connecticut hedge fund, is attempting to reclaim more than $100 million from investors, including a fund called Sterling Stamos in which the owner of the New York Mets baseball team, Fred Wilpon, has a stake. In a separate matter, a Long Island family is suing several fellow investors in a bogus hedge fund called Sterling Watters. Among defendants: a former official of the Securities and Exchange Commission. (See related article.)

Those cases, like the Lipper case, are pending in state Supreme Court in Manhattan. Individuals who profited "should be sharing the pain," says Jeff Marwil, the federal trustee in charge of liquidating Bayou. "Our goal is to equalize in a fair and equitable fashion." Bayou collapsed last summer after two founders revealed they had inflated profits figures and did not have the $450 million investors believed they had in the fund. The founders pleaded guilty to fraud and await sentencing. In February, Bayou filed for protection under Chapter 11 of the U.S. bankruptcy code.

Mr. Marwil has filed several lawsuits in recent months to retrieve money from investors. Among them is UT Medical Group, a private-practice arm of University of Tennessee Health Science Center, which declined to comment on the lawsuit. Mr. Marwil is still tallying how much money was removed; others familiar with the matter estimate that as much as $250 million could be reclaimed. He says he intends to file several more lawsuits.

Unlike the Lipper cases, Mr. Marwil wants Bayou investors to return more than their profits: He also wants them to give back the money they originally put into the fund. So far, he is concentrating on investors who cashed out less than two years before he brought suit. That is the statute of limitations under bankruptcy law, though under state laws he could ultimately extend further back. "Every payment made by the hedge fund needs to come back," he says. "We will then determine payment scheme based on the amount of time the investor was in the fund and the losses in the fund."

Among investors who got out before the meltdown was Sterling Stamos. In early 2005, it withdrew tens of millions of dollars from Bayou, according to people close to the matter. The firm hasn't been sued, but its account has been reviewed by Mr. Marwil. An attorney for Sterling Stamos declined to comment. The suit alleges that the money was unfairly paid out as part of the scheme by the managers to defraud investors. It is akin to Ponzi schemes, in which newcomers' money is paid to people who want to cash out, in order to create the false impression that the business is financially successful.

Similar issues surrounded Bennett Funding Group, which sought protection under bankruptcy laws in the mid-1990s, after federal securities regulators accused company officials of a scheme to cheat investors. A trustee overseeing the case, former SEC chairman Richard Breeden, liquidated Bennett, then sued thousands of investors who had cashed out. The effort recouped only a fraction of the money.

Charles Gradante, a partner in Hennessee Group, a hedge-fund consultant, is among those lauding the wave of new suits. Those who invested in Bayou on the advice of Hennessee collectively lost an estimated $20 million, he says. Ross Intelisano, a lawyer representing about 20 investors who also collectively claim to have lost $20 million in Bayou, said, "Our clients are very supportive."

The legal grounds are similar in a case filed by a Long Island family that claims to have lost about $7 million in a fund called Sterling Watters. It was launched in 1995 by a former Merrill Lynch broker named Angelo Haligiannis. He reported to investors that he was making annualized returns of 35% to 40%.

Among investors who profited was Peter Derby, who last year left the SEC where he was managing director for operations under former chairman William Donaldson. Mr.Derby had invested $1 million in 2002 and got that back, along with $185,000 in profits, when he redeemed a year later, according to records reviewed by people close to the matter.

Another investor, Jerry Drenis, contends that Mr. Derby and others were essentially paid with money stolen from others, including Mr. Drenis and his family. Mr. Drenis and his relatives collectively lost more than $7 million, he says. They are suing Mr. Derby and two dozen other investors. "Angelo Haligiannis gave away our money to pay off other investors," says Mr. Drenis, the owner of a heating-oil business. "It's not their money to keep."

Sterling Watters, the Justice Department says, raised more than $25 million by misrepresenting its performance figures through a classic Ponzi scheme. Mr. Haligiannis vanished before his sentencing earlier this year. Mr. Derby has filed a motion to dismiss the suit. "Even if the allegations are true -- which, of course we'd dispute if the ruling went against us -- there is no viable cause of action in which plaintiffs can recover" money, says Mr. Derby's attorney, Gary Kushner. Among other things, he says, limited partners in a corporation can't sue each other under state law.

Another defendant, Joseph Biasucci, a 68-year-old retired executive of the Teamsters union, says that he can't give back his profits. "I don't have it," he says. "I paid capital-gains taxes, and I spent the rest." Mr. Biasucci says he found out about Sterling Watters through a lawyer in the mid-1990s and invested $50,000. He says that it ostensibly grew to about $130,000 over 10 years. He dipped in now and then, he says, to pay bills and taxes, coming out a bit ahead. Still, the paper loss was devastating, he says. "This was my retirement money."

In the Lipper case, the fund's namesake, Ken Lipper, made many connections working as a former deputy under Mayor Koch, and as the author of the novel "Wall Street."

Among numerous prominent investors was Mr. Kravis's children's trust, which court documents show made a $2.6 million investment in 1995. In 2001, the trust was paid a profit of $2.8 million. It wasn't until two years later that Lipper sent the letter to investors saying that it had discovered that the profits had been inflated by more than $300 million. A portfolio manager, Edward Strafaci, pleaded guilty in 2004 to a federal charge of securities fraud and was sentenced to six years in prison.

Given the revised figures, the lawsuit filed last year by Mr. Williamson says, the Kravis trust should have received only $712,346. Thus, it "erroneously" received a $2.17 million windfall that "greatly exceeded the value" of its interests. The Kravis trust has filed a motion to dismiss that suit.

Mr. Cusack's Lipper investment, which totaled $300,000, was made in the mid-1990s, court documents show. In 2000, he was given $537,705, or an alleged overpayment of $166,123 plus $67,025 interest. In an answer filed last month, a lawyer for Mr. Cusack says that "the damages alleged in the complaint were not caused by the alleged 'excess' payments to Cusack."

Enormous losses at one of the nation’s largest hedge funds resurrected worries yesterday that major bets by these secretive, unregulated investment partnerships could create widespread financial disruptions.

The hedge fund, Amaranth Advisors, based in Greenwich, Conn., made an estimated $1 billion on rising energy prices last year. Yesterday, the fund told its investors that it had lost more than $3 billion in the recent downturn in natural gas and that it was working with its lenders and selling its holdings “to protect our investors.”

Amaranth’s investors include pension funds, endowments and large financial firms like banks, insurance companies and brokerage firms. The Institutional Fund of Hedge Funds at Morgan Stanley was an investor in Amaranth; as of June 30, it had a stake valued at $124 million. The turnabout in the fortunes of the $9.25 billion fund reflects the decline in energy prices recently; natural gas prices fell 12 percent just last week.

Yet also last week, Charles H. Winkler, chief operating officer at Amaranth, had met with prospective investors at the Four Seasons restaurant in Manhattan and reported that his fund was up 25 percent for the year, according to a meeting participant. Days later, rumors began circulating that Amaranth was losing money in one of its natural gas bets, a trade that had generated enormous profits for the fund in recent years.

Late in the week, the fund’s traders began dumping large stakes in convertible bonds and high-yield corporate debt, securities that could be sold without disrupting the market.

The scale of Amaranth’s losses — and how quickly they appear to have mounted — was the talk of Wall Street yesterday, as was speculation on how much the bet was leveraged, or made on borrowed money. Still, there were no signs of ripples on the financial markets as a result.

Amaranth’s woes are largely the result of a decline in natural gas prices that began in December, well before the spring months of March or April, when they typically fall off. Amaranth’s biggest stake was a combination bet on the spread between natural gas futures prices for March 2007 and those for April 2007. Amaranth had often bet that the spread on that so-called shoulder month — when natural gas inventories stop being drawn down and begin to rise — would increase.

But instead the spread collapsed. In the last six weeks, for example, the spread between the two futures contracts ranged from $2.50 at the end of July to around 75 cents yesterday.

Traders briefed on Amaranth’s problems, including one person who examined the fund’s books yesterday, said that the losses might be considerably larger than the firm estimated. Over the weekend, according to one person briefed on the situation, Goldman Sachs examined the fund’s positions.

Amaranth is not the first hedge fund to experience problems in energy markets. MotherRock Energy Fund, a $400 million portfolio, shut down last month after losing money on its bets that natural gas prices would fall. Summer heat sent prices soaring and the fund lost 24.6 percent in June and 25.5 percent in July, according to one investor.

The natural gas market is exceptionally volatile, making it an ideal playground for hedge funds that thrive on wide price movements in securities. Natural gas prices are subject to more severe swings than oil, in part because gas cannot be stored easily.

Arthur Gelber, the founder of Gelber & Associates, an energy advisory and consulting firm based in Houston, said that as a result, the natural gas market was about five times more volatile than the stock market.

The greatest demand for natural gas occurs during very hot or very cold weather, Mr. Gelber said. During mild periods, like early autumn, an oversupply of natural gas can cause a significant decline in price. Hedge funds have added to this natural volatility, he said.

Amaranth was founded six years ago by Nicholas M. Maounis, a former portfolio manager who had specialized in debt securities at Paloma Partners, another large hedge fund. Amaranth employs a so-called multistrategy approach to investing that allows nimble portfolio managers to seize opportunities in whatever markets seem to be most promising at the time.

Now that Amaranth has owned up to huge losses in a single sector, “multistrategy’’ seems to have been a misnomer at the fund.

In his letter to investors, Mr. Maounis, 43, wrote: “In an effort to preserve investor capital, we have taken a number of steps, including aggressively reducing our natural gas exposure.”

Amaranth has additional offices in Houston, London, Singapore and Toronto and employs 115 traders, portfolio managers and analysts, according to its Web site. The firm deploys capital “in a highly disciplined, risk-controlled manner,” it noted.

Its energy portfolio has been overseen by Brian Hunter, a trader who joined the fund from Deutsche Bank in 2004 and conducts trades from his hometown of Calgary, Alberta. Mr. Hunter made enough money at Amaranth in 2005, an estimated $75 million to $100 million, to place him among the 30 most highly paid traders in Trader Monthly magazine.

Rocaton Investment Advisers, a consulting firm in Norwalk, Conn., whose clients have $235 billion in assets, recommended Amaranth to its customers. Yesterday, Robin Pellish, Rocaton’s chief executive, declined to comment on her firm’s relationship with the fund or to identify clients that it had advised to invest in it.

“We’re well aware of the situation with Amaranth and we are monitoring developments,” Ms. Pellish said.

Citing Amaranth’s woes, Stewart R. Massey, founding partner of Massey, Quick & Company, an investment advisory firm in Morristown, N.J., said, “I think it will cause investors to go back and take another hard look at the multistrategy funds they are invested in and do a deeper round of due diligence.” Mr. Massey said he did not have any exposure to Amaranth.

The problems at Aramanth will help fuel a debate over whether more oversight is needed over hedge funds, which have become increasingly powerful forces in the markets. There are nearly 9,000 hedge funds, managing more than $1.2 trillion in assets. In 1990, hedge funds managed just $38.9 billion, according to Hedge Fund Research.

Last week, in a speech in Hong Kong, the president of the Federal Reserve Bank of New York, Timothy F. Geithner, said greater attention needed to be paid to the margin requirements and risk controls in dealings with hedge funds.

The growth in hedge funds, Mr. Geithner noted, will eventually “force us to consider how to adapt the design and scope of the supervisory framework to achieve the protection against systemic risk that is so important to economic growth and stability.’’

In 2004, Amaranth protested a new rule proposed by the Securities and Exchange Commission that would have required certain hedge funds to register with federal regulators and undergo greater scrutiny.

“Contrary to media stereotypes of hedge fund managers, Amaranth does not ‘operate in the shadows’ outside of regulatory scrutiny,” its general counsel wrote. “We do not understand why the commission is proceeding so urgently with this rulemaking when the public policy problem to be addressed remains poorly defined and the proposed regulatory response is so burdensome.”

The rule, which was issued in late 2004, was struck down in June by the United States Court of Appeals for the District of Columbia. Last month, the S.E.C. declined to appeal the ruling.

Huge losses on natural-gas investments reported by Amaranth Advisors are expected to extend far beyond the multistrategy hedge fund itself -- and could have an impact on investors' appetite for riskier investments in other markets.

The fund, based in Connecticut, told investors in a letter yesterday that it ran into a nasty patch in September, with its energy-trading desk losing $5 billion in about a week. Its assets under management have dropped to $4.5 billion, from $9 billion at the start of September. Despite the losses suffered by Amaranth, several winners emerged. Among them, Centaurus Energy, a Houston hedge fund run by former Enron trader John Arnold that is now up more than 100% for the year. It continued to make profits in recent days trading in the same markets that scorched Amaranth, according to investors familiar with the situation.

According to prime brokers who deal with hedge funds, funds-of-funds executives and others active in the commodities market, winners during the recent downdraft in natural-gas prices also included Tudor Investment Corp. and four Wall Street firms: Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co. and J.P. Morgan Chase & Co.'s J.P. Morgan Securities. Traders at the Wall Street firms stressed that they weren't actively trading against Amaranth. Representatives at Tudor and the Wall Street firms declined to comment. A spokesman for Amaranth declined to comment.

While some were winning in the rough energy markets, the size of Amaranth's losses captured most of the attention yesterday. With new money having moved into commodities markets in the past few years, some investors are concerned about a swift exodus if these markets remain weak. For instance, the Commodity Real Return fund of Allianz AG's Pacific Investment Management Co., or Pimco, which invests in a number of commodities, has grown to more than $12 billion from $8 billion in about a year.

The losses also underscored concerns about hedge funds taking large, concentrated risks, often using borrowed money to amplify these bets. In markets as wickedly volatile as natural gas, investment risk models don't always hold up amid sharp swings. "Natural gas is the most volatile of anything that trades in the futures markets," says the founder of one multistrategy hedge fund. "To produce those kinds of losses means" borrowing about $8 for every $1 invested. In the most famous hedge-fund implosion, Long-Term Capital Management used larger amounts of borrowed money, or leverage, but focused on far less volatile debt markets.

As a hedge fund that trades across many markets, the fact that Amaranth recorded losses in just one market came as a particular shock. Before the September trading debacle, Amaranth reported that it gained 6% in August and was up roughly 22% for 2006 through the end of that month. That means that from peak to trough this year the fund plummeted 57%. The sudden losses in September indicate that the amount of capital that was tied up in energy trades must have been a significant portion of all Amaranth's capital.

None of the many prime brokers that act as counterparties and financiers to Amaranth have had any trouble when they asked for more collateral against Amaranth's losing positions. But Amaranth's losses are so big that they are expected to hurt September results for both the institutional investors and the many funds of funds that had placed money with Amaranth.

Because Amaranth can impose limits on investors' ability to withdraw funds, prime brokers said, the fund won't be faced with an immediate call for redemptions. Although it isn't clear if the fund will impose limits, Amaranth will face pressure nevertheless from investors anxious about the plight of their money invested in the fund.

Investors pulling their money aren't the only potential source of strain. For example, many derivatives contracts have clauses that give counterparties the right to close out those transactions in the event of a change in material circumstances. That means Amaranth may be forced to sell positions in other markets to close out derivatives contracts. "Amaranth will have to constantly unwind positions, and that could put pressure on other markets, even if the brokers don't force Amaranth to liquidate," says the head of one fund that invests in many hedge funds on behalf of investors.

The losses at Amaranth are likely to renew calls for greater transparency among hedge funds. Many funds-of-hedge-funds executives say they declined to invest with Amaranth because of its lack of disclosure.

Write to Henny Sender at henny.sender@wsj.com and Gregory Zuckerman at gregory.zuckerman@wsj.com

Hedge funds, already dodging calls for more oversight, now have a new nemesis: British tax cops. In a clear sign that United Kingdom tax authorities are keen to crack down on the tax practices of high-rolling hedge funds, GLG Partners Services Ltd., a Cayman Islands entity that distributes hedge funds run by GLG Partners LP, has settled a probe by British tax officials, people familiar with the situation said.

At issue: whether GLG Partners had attempted to lower its taxes by improperly shifting some of its income and expenses to the Cayman Islands entity. A popular tax haven, the Cayman Islands is referred to in accounting circles as a "tax-neutral jurisdiction" meaning that it levies no personal or corporate income tax. Terms of the settlement were unclear. GLG declined to comment. HM Revenue and Customs, Britain's combined tax and customs agency, said only that its investigations into tax practices are "all risk or intelligence led." GLG Partners, one of the world's largest hedge funds, manages more than $16 billion out of offices in London's Mayfair district.

Assets in U.K. hedge funds -- which are lightly regulated investment pools catering to the wealthy -- have nearly quadrupled, to $128.9 billion at the end of the second quarter from $33.1 billion in 2000, according to Hedge Fund Research Inc., a Chicago-based firm that compiles data on hedge funds. That is nearly 11% of the $1.2 trillion invested in hedge funds world-wide, according to HFR.

The GLG settlement is part of a broader effort by British tax authorities to reclaim as much as £1 billion, or about $2 billion, in lost taxes from hedge funds, accountants say. The focus by British tax authorities on hedge funds arose because "the hedge-fund industry had exploded, and a lot of structures were put in place which led [officials] to believe that the fund manager wasn't being fully taxed with respect to its U.K. activities," said John Neighbour, who left Britain's tax authority in March. The broad investigation has been continuing for a couple of years, but had "picked up momentum" recently, said Mr. Neighbour, who now is a partner at KPMG LLP in London.

If a hedge fund has $1 billion in assets sitting offshore and earns 20% in a year, "that's $200 million of gain potentially not being taxed in the U.K. at rates of 30% to 40%," says Robert Mirsky, head of Deloitte & Touche LLP's hedge-fund practice in London. "We are talking big numbers here." Though the offshore entity is legally separate from the U.K. hedge fund, tax officials are concerned that many of the companies registered offshore, often in tax havens such as the Cayman Islands, are ultimately controlled by the U.K. hedge fund.

The Cayman Islands is home to more than 8,000 registered hedge funds, a jump of more than 2,000 hedge funds since the start of 2005, according to the Cayman Islands Monetary Authority. Mr. Mirsky said British tax authorities are concerned about two issues. They are examining whether the fees hedge funds charge, often a 2% management fee and a 20% performance fee, are appropriately split between a hedge fund's U.K. manager and the offshore entity, he said. Even though the source of a hedge fund's income may be offshore, tax authorities are focused on whether the income was truly generated by activities
carried out offshore.

More broadly, he said, British tax officials are examining the nature and purpose of a hedge fund's offshore entity. The questions tax officials are raising are, "Who is controlling the entity, where is it being controlled and is it a sham to have the entity offshore when its operations are onshore?" Mr. Mirsky said.

In the past year, GLG has been busy fighting regulatory fires. In February, Britain's Financial Services Authority informed GLG that it plans to fine the firm and a star trader £1.5 million in connection with improper trading in the securities of Sumitomo Mitsui Financial Group Inc. GLG isn't appealing the FSA ruling and the trader, Philippe Jabre, recently withdrew his appeal. Separately, French regulators are examining, as part of a broader investigation, whether two GLG funds profited from nonpublic information about convertible-bond issues.

GLG Partners Services and some of its employees have been under investigation for more than a year, people familiar with the situation said. At GLG Partners, for instance, some marketing executives and portfolio managers received about 20% of their salary from the Cayman Islands entity, these people said. Employees who drew a portion of their salary from GLG Partners Services received letters this summer informing them that the firm has reached a settlement with Britain's HM Revenue and Customs, according to these people.

The settlement covered the tax years from April 2001 to April 2006, according to the letter, which was reviewed by The Wall Street Journal. The letter also hinted at some of the tax issues at stake. "It has been agreed with GLG Partners Services Ltd. that as of April 6 2006 any emoluments you receive in respect to your employment services to that company or any successor vehicle will be subject to full UK [Pay As You Earn] and National Insurance," taxes, one letter read. UK PAYE tax is much like withholding tax in the U.S. and, as in the U.S., employers are required to collect it. National insurance is a 12.8% tax on employers that is similar to U.S. Social Security.

RGE - Unintentional irony watch (hedge fund edition): Risk management standards do seem to be slipping. Davis, Sender and Zuckerman in the Wall Street Journal:

The risk models employed by hedge funds use historic data, but the natural gas markets have been more volatile this year than any year since 2001, making the models less useful. They also might not predict how much selling of one’s stakes to get out of a position can cause prices to fall.

The models broke down because this year has been more volatile than any year since 2001? That isn’t so long ago, except in hedge fund time... I suspect Mr. Geithner won’t be happy if stress tests -- and risk management models -- don’t look a bit further back. 1998 might be a relevant data point. Certainly for anyone betting on emerging markets, the yen/dollar (or the yen/ euro, since the dyanmics of an unwinding carry trade are similar) or the Treasury market. 1998 also might be a relevant data point for a few commodity markets. Mr. Geithner also wants – I suspect – those lending to hedge funds to assume that liquidity will dry up when their clients need it the most. Getting out when you don’t need to is easy. Getting out when you absolutely have to is hard. Especially if you have a large concentrated position...

That lesson may be relevant for another set of institutions with large positions. A few central banks might also want to ponder the impact large, sustained purchases can have on market dynamics. Davis, Sender and Zuckerman, again.

According to natural gas investors who traded alongside Amaranth, Mr. Hunter repeatedly used borrowed money to double down on his bets. Buying more futures contracts of the kind his fund already owned supported their price by increasing demand, propping up paper gains, these traders say. But the support only lasted so long as Amaranth and its lenders were willing to spend cash to buy more contracts. Such trades may also have masked growing weakness in market fundamentals.

Substitute dollars, Treasury bonds and Agency bonds for “futures” and “contracts,” and substitute the PBoC (and a few others) for Amaranth...

China is making a huge bet that Stephen Jen and Friedrich Wu are right, and the RMB isn’t really undervalued (and the dollar and euro are not overvalued against the RMB). It is betting that the RMB wouldn’t really rise if it stopped buying. That is a rather large gamble though.

Especially since Chinese productivity is growing faster than US productivity (see the graphs on p. 13 of Feng Lu’s presentation), so a key “fundamental” is moving against China’s financial position...

I think Fan Gang at least understands as much. Yu Yongding as well. And Zhou Xiaochuan.

The Politburo and State Council may understand it. They may be thinking as follows: "We grow at 8% per year as long as we can keep export-led industriallization going. When export-led industrialization stops and we have to substitute domestic-demand-led industrialization, our growth rate is likely to fall to 5%. Thus each year we keep this juggling act going raises China's GDP--permanently--by about RMB 500 billion a year, an increment to the present value of China's total national wealth of RMB 10 trillion. To keep the juggling act going requires that we spend RMB 3 trillion a year buying dollar-denominated securities that will be worth only RMB 2 trillion when we sell them. That looks like a benefit-cost ratio of 10:1. So let's keep juggling as long as we can.

Amaranth Advisors, the $9.2 billion hedge fund that lost $6.5 billion in less than a month, is preparing to shut down.

Nicholas Maounis, the founder of the hedge fund, sent a letter to investors last night informing them that the fund was suspending all redemptions for Sept. 30 and Oct. 31, to “enable the Amaranth funds to generate liquidity for investors in an orderly fashion, with the goal of maximizing the proceeds of asset dispositions.”

Investors have met with Amaranth throughout the week, many demanding the return of their money. “As you know, the multistrategy funds have recently received substantial redemption requests,” Mr. Maounis said in the letter.

The letter represents a turnabout for Mr. Maounis, who just a week ago expressed hope at the end of a conference call that he would be able to continue the fund’s operations. “We have every intention of continuing in business, generating for our investors the same consistently high risk-adjusted returns which have been our hallmark,” he said on Sept. 22.

When investors are allowed to take money out of the fund, redemption fees and charges will be waived, the letter said. Cash distributions will be divvied up proportionately.

The fund has lost $6.4 billion, according to the letter, which said assets were down 65 to 70 percent for the month and 55 to 60 percent for the year. Amaranth started the year with $7.5 billion and then soared to $9.2 billion before stumbling to less than $3 billion today.

Amaranth’s energy desk, run by a young trader, Brian Hunter, bet aggressively on natural gas. When certain prices fell this month, the fund found itself in positions too big to liquidate. Ultimately, it was forced to sell its energy holdings when some of its counterparties threatened to cut off its credit. J. P. Morgan Chase and Citadel Investments, another hedge fund, bought the book of energy trades for an undisclosed price, although Amaranth said the sale was done at a loss.

At different points, the fund was in discussions with buyers, including Citigroup, to possibly acquire some of the remaining assets. But with investors clamoring to get their money back, such a sale would be difficult. Amaranth said it continued to “pursue negotiations but have no announcement at this time,” a signal many investors took to mean any potential sale was off.

The letter said Amaranth planned to remain in business but was not certain what it would do. A spokesman for the fund, which is based in Greenwich, Conn., declined to comment beyond the letter.

Nimmt man das Transaktionsvolumen als Massstab, waren Private-Equity-Investoren in den letzten vier Jahren etwa an jeder vierten Akquisition in Europa beteiligt. Auch die grössten Konzerne sind längst nicht mehr vor Übernahmen sicher. Vor allem die auf die Finanzierung von Besitzerwechseln spezialisierten Buyout-Fonds sorgen mit Milliardentransaktionen für Schlagzeilen und heizen das Fusions- und Übernahmegeschäft an. Sie haben im laufenden Jahr weltweit Kapital in Höhe von über 300 Mrd. $ gesammelt und rege investiert. Je länger der Boom allerdings anhält und je mehr Kapital den Fonds zufliesst, desto stärker deuten einzelnen Signale auf Übertreibungen hin. Es sind vor allem drei Phänomene, die in jüngster Zeit einen schalen Nachgeschmack hinterlassen: Die Investoren scheinen sich zunehmend kurzfristiger auszurichten, bei den involvierten Banken treten vermehrt Interessenkonflikte zutage, und der Vorwurf der Wettbewerbsbehinderung steht im Raum.

In manchem symptomatisch ist der Fall Hertz. Die amerikanische Autoverleih-Firma ist im vergangenen Jahr von den Private- Equity-Häusern Clayton Dubilier & Rice, Carlyle Group und Merrill Lynch Global Private Equity für 15 Mrd. $ dem ehemaligen Mutterkonzern Ford abgekauft worden und soll voraussichtlich nächste Woche an die Börse gebracht werden. Die drei Besitzer, die voraussichtlich auch nach dem IPO ihre Hertz- Beteiligung behalten werden, wollen sich einen Teil des Emissionserlöses als Sonderdividende auszahlen lassen. Es wäre bereits die zweite Ausschüttung, die sich die Financiers seit der Übernahme Ende 2005 «genehmigen». Falls alles nach Plan läuft, werden sie fast zwei Drittel der für den Kauf aufgewendeten Barmittel (2,3 Mrd. $) nach einem Jahr zurückerhalten haben. Gleichzeitig hat sich allerdings die finanzielle Situation des ehemals gesunden Konzerns deutlich verschlechtert.

Es ist zwar durchaus üblich, dass Financiers ihre Investitionsobjekte relativ rasch und gewinnbringend an einen anderen Investor, an ein Unternehmen oder über die Börse veräussern. Dass dies jedoch schon nach einem Jahr geschieht, ist ungewöhnlich, zumal Branchenvertreter gerne auf die Langfristigkeit ihrer Engagements verweisen und damit teilweise ihre hohen Renditen rechtfertigen. Auch rasche Ausschüttungen sind weit verbreitet: Rund ein Drittel der mit Fremdkapital operierenden Buyout-Fonds zahlt sich im Vorfeld eines Börsenganges eine Dividende aus. Ebenso sind die Beteiligungsvehikel für ihr «financial engineering» bekannt. Ein grosser Teil des Kaufpreises wird in der Regel über Kredite finanziert, die wiederum den Übernahme-Objekten aufgebürdet werden.

Im Falle Hertz beurteilt indessen selbst die sonst mit öffentlicher Kritik eher zurückhaltende Rating-Agentur Standard & Poor's (S&P) die Finanzierungs- und Ausschüttungspolitik der Investoren als «unerwartet aggressiv». Angesichts der geschwächten Finanzlage des Konzerns werden seine Verbindlichkeiten seit der Übernahme mit der Bonitätsnote «BB-» als spekulativ eingestuft. Zugleich weist S&P warnend darauf hin, dass Hertz für künftige Kredite keine Sicherheiten mehr vorweisen könne.

Es ist zwar Sache der Anleger, ob sie sich an einer Aktienemission beteiligen oder durch Nichtbeteiligung ihre allfällige Skepsis gegenüber der Solidität des Unternehmens demonstrieren wollen. Doch das zu kurzfristige Rendite-Streben einzelner Private-Equity-Firmen droht die Branche in Verruf zu bringen und diejenigen Kräfte zu stärken, die Hedge- Funds und Private Equity längst strikteren Regulierungen unterwerfen möchten.

Am Beispiel der Hertz-Transaktion lassen sich auch potenzielle Interessenkonflikte der beteiligten Banken erkennen. Merrill Lynch fungiert nämlich über ihre Private-Equity-Einheit nicht nur als Eigentümerin, sondern zusammen mit anderen Instituten auch als Kreditgeberin und schliesslich auch als IPO- Beraterin von Hertz. Sie hat also von Dividendenausschüttungen profitiert, als Kreditbank mitverdient und wird nun beim geplanten Börsengang Gebühren einnehmen. Der Anreiz, Investitionsobjekten möglichst viel Fremdkapital aufzubürden, ist bei solchen Interessenverquickungen naturgemäss gross. Das ebenfalls hohe Ausfallrisiko, wenn kreditfinanzierte Übernahmen und hohe Dividendenausschüttungen zusammenkommen, lässt sich durch Verbriefung der Kredite absichern.

Insgesamt weist der Hertz-Deal manche Parallelen zur New-Economy-Phase Ende der neunziger Jahre auf. Auch damals waren Banken und Besitzer bestrebt, Firmen rasch an die Börse zu bringen, ohne der Bonität des Unternehmens gross Beachtung zu schenken. Die Finanzinstitute hielten dabei mit schönfärberischen Research-Berichten das IPO-Geschäft in Gang und langten bei Gebühren sowie der Aktienzuteilung kräftig zu. Und auch damals gab es Kapital «im Überfluss».

Einige Private-Equity-Häuser wie Blackstone, KKR, Permira und Texas Pacific haben kürzlich Fonds von über 10 Mrd. $ lanciert und stehen deshalb unter Investitionsdruck. Um sehr grosse Transaktionen überhaupt tätigen zu können, legen sie ihre Kräfte daher immer öfter zusammen. Das hat dazu geführt, dass sich unlängst das für Wettbewerbsfragen zuständige amerikanische Justizdepartement bei einigen Fonds-Häusern gemeldet hat, um abzuklären, ob im Rahmen sogenannter Club- Deals Preisabsprachen stattgefunden haben. Vereinzelt dürften die Zusammenschlüsse tatsächlich geholfen haben, preistreibende Auktionen mit Hilfe der Einbindung der Konkurrenz zu verhindern. Im Urteil von Juristen wird es aber schwierig sein, den Fonds wettbewerbsrechtliche Verfehlungen nachzuweisen. Es lässt sich nämlich auch argumentieren, Club-Deals dienten insofern dem Wettbewerb, als sie Übernahmen im oberen Preissegment überhaupt erst ermöglichten.

Solange es sich bei dem zunehmend kurzfristigeren Rendite-Streben, den Interessenkonflikten einzelner Mitspieler und dem Geruch der Wettbewerbsbehinderung um Einzelfälle handelt und nicht um den Beginn einer neuen Raubritter-Phase, muss es nicht zu einem grösseren Imageschaden für die Private-Equity-Investoren kommen.

Schliesslich haben sie in den vergangenen Jahren unzähligen Firmen die Finanzierung ermöglicht, mittelmässige Unternehmen zu Höchstleistungen angespornt und Restrukturierungen vorangetrieben. Sollten sich die Tendenzen jedoch verstärken, könnten innert kürzester Zeit jahrelange Bemühungen, das Barbaren-Image abzustreifen, zunichte gemacht werden.

Some top private-equity funds have joined to form a lobbying organization to head off potential regulation.

The funds have become some of the most active purchasers of U.S. corporations, pooling money from private investors and companies and augmenting those sums with loads of debt. More than 28 percent of the dollar value of acquisitions announced in the United States this year involved private-equity firms, up from 3 percent five years ago, according to Dealogic.

The new organization, the Private Equity Council, is backed by such leaders in the burgeoning business of company buyouts as Blackstone Group, Carlyle Group and Kohlberg Kravis Roberts. Douglas Lowenstein, president of the Entertainment Software Association, which represents the U.S. video game industry, will head the trade association.

The move is the latest effort by the financial services industry to bolster its presence in Washington. The association that represents hedge funds, the Managed Funds Association, recently added to its staff, and the Securities Industry Association and the Bond Market Association merged this year to form what they hope will be a more influential lobby. The combined organization is the Securities Industry and Financial Markets Association, or SIFMA.

In late spring, several of the nation's largest private-equity firms started to discuss creating a lobby group. The decision was precipitated by recognition that they were becoming the target of tough criticism in the United States and in Europe; in Germany, for instance, a state governor referred to private-equity firms as "locusts."

Carlyle, Kohlberg Kravis Roberts and other firms were sued last month by investors who claimed they conspired to hold down the amounts they pay for companies. A regulator in Britain is also investigating market abuse in private-equity transactions.

Private-equity firms collect large pools of funds from wealthy individuals, pension funds, college endowments and other sources and use the proceeds, along with loans, to buy all or large parts of companies. Hedge funds also amass money from similar sources but engage in usually shorter-term investments in such things as stocks and bonds.

Both are lightly regulated by the government, and that has caught the attention of lawmakers and senior officials in the executive branch, including those in the Securities and Exchange Commission. Christopher Cox, chairman of the SEC, has been pressing for more oversight of hedge funds, for example, which is now a $1 trillion industry.

The core group of firms behind the Private Equity Council are Blackstone, Carlyle, KKR and Texas Pacific Group. Initially, the association will consist of 15 to 20 firms and will be staffed by Lowenstein and a small group of senior people who will focus on commissioning research about the private-equity industry and its benefits to the economy.

Lowenstein could not be reached for comment yesterday, but in statement the council said it "will become a leading advocate for the domestic and international private equity industry as well as a resource for those seeking to better understand the industry's role in the rapidly evolving global economy."

Imagine two successful companies. Both are staffed by very smart people; both are innovative; both have an impact far beyond their industry, improving the productivity of the capitalist system as a whole. But the first, based near San Francisco, is the subject of adoring newspaper profiles, whereas the second, based in the New York area, is usually vilified.

Actually, you do not have to imagine any of this, because it describes a double standard that already exists. The first company in the story is a technology firm; the second is a hedge fund. As any newspaper reader knows, technology firms are the leading edge of the U.S. knowledge economy; they made possible the productivity revolution of the past decade. But the same could just as well be said of hedge funds, which allocate the world's capital to the companies, industries, and countries that can use it most productively.

Of course, that is not how hedge funds are viewed most of the time. The recent implosion of Amaranth Advisors -- a hedge fund that lost $6 billion in a matter of days thanks to one Ferrari-driving 32-year-old trader (and his greedy bosses' abandonment of proper risk management) -- has rekindled the fears that attended the collapse of Long-Term Capital Management in 1998, an event that even then Federal Reserve Chair Alan Greenspan believed "could have potentially impaired the economies of many nations, including our own."

In the United States, the Securities and Exchange Commission (SEC) has tried to regulate the sector further -- a 2004 SEC rule requiring the registration of hedge-fund advisers was vacated by a federal court in 2006 -- and continues to be interested in increasing oversight. The attorney general of Connecticut, a state in which many hedge funds are headquartered, has set up a special unit to prosecute hedge-fund abuses and decries what he regards as the "regulatory black hole" in which these funds exist. In East Asia, governments still blame hedge funds for their supposed role in the 1997-98 financial crisis. And in Europe, Franz MÃ¼ntefering, Germany's deputy chancellor, has complained that hedge funds "remain anonymous, have no face, fall like a plague of locusts over our companies, devour everything, then fly on to the next one."

Such antipathy seems likely only to intensify as hedge funds continue their extraordinary growth. In the eight years since Long-Term Capital collapsed, the volume of money managed by U.S. hedge funds has risen from about $300 billion to well over $1 trillion, according to HedgeFund Intelligence. In Europe and Asia, meanwhile, assets under hedge-fund management have grown to $325 billion and $115 billion, respectively, and London has emerged as a hedge-fund center second only to the New York area. The total assets in the hedge-fund sector remain much smaller than those in banks and pension funds. But whereas hedge-fund assets have quintupled in eight years, the world's stock of equities, tradable debt, and bank deposits has only doubled, according to data from the McKinsey Global Institute. Moreover, because the sector as a whole is leveraged and some funds trade intensively, hedge funds are thought to account for a third of the turnover in U.S. equities and an even higher share in more exotic financial instruments.

The fear of the growing influence of hedge funds is compounded by the aura of mystery that surrounds them. Whereas financial markets thrive on transparency, hedge funds are limited in what they can disclose to the public at large. They are sold through privately distributed prospectuses that describe the funds' investment parameters, terms of investment, redemption rules, and the like. But even some of the fund-of-funds managers who have emerged as expert intermediaries between hedge funds and investors have only a general idea of the trading strategies that some of their component funds pursue.

The suspicion is pervasive enough to make a new regulatory push seem probable. This past October, Senator Chuck Grassley (R-Iowa), the outgoing chair of the Senate Finance Committee, complained in a letter to Treasury Secretary Henry Paulson that ordinary Americans are increasingly exposed to hedge funds via their pension plans and demanded to know why the funds are allowed to get away with secrecy. Press coverage is suffused with the supposition that more regulation would be welcome, and even an October survey of private economists conducted by The Wall Street Journal found that a majority favored tougher oversight. Industry leaders who once might have urged regulators to leave them alone now plead instead only that restrictions should avoid being too onerous. And European regulators are as keen to subject hedge funds to controls as their American counterparts.

But the fear of hedge funds is overblown, based more on ignorance or simplistic caricatures than on actual knowledge. Many of the proposals for new regulation are so vague as to be impossible to evaluate or are poorly suited to address the supposed problems at issue. And even the most serious cause for concern -- that hedge-fund operations might generate a "systemic risk" for the financial system as a whole -- is neither limited to the hedge-fund sector nor best addressed through regulation of it. Rather than seeing hedge funds as sources of dangerous financial fires, in fact, it is more accurate to see them as the financial system's benevolent fire fighters -- and to let them have the tools they need to do their jobs well.

Along with the growth of the hedge-fund sector has come variation that makes generalizations difficult. Hedge funds are private investment pools allowed to operate with a great deal of freedom and flexibility, including having the ability to leverage their assets through borrowing and to bet that stocks will fall as well as rise. Some use intensely mathematical methods; others pursue stock-picking strategies that depend on human judgment about the quality of corporate managers. Some borrow and trade aggressively; others do not. Arbitrage funds take no view on markets' fundamental value but exploit price misalignments between equivalent assets; other funds trade on convictions about value, using various methods of assessing it.

If hedge funds are not actually an army of undifferentiated attack clones, neither are they entirely unregulated, despite the popular image. Like any other investors, hedge-fund managers are subject to prosecution for insider dealing or fraud; they are overseen by the SEC if they have broker or dealer affiliates; they may be regulated by the Commodity Futures Trading Commission if they trade futures or by the Federal Energy Regulatory Commission if they trade energy contracts; their borrowing is indirectly monitored by the Federal Reserve; and so on. Further regulation may or may not be appropriate, but any benefits it might bring would have to be measured against the risks of impeding innovation in the capital markets -- an outcome that would be about as desirable as stifling innovation in Silicon Valley.

Popular resentment of hedge funds begins with the suspicion that they earn too much. The founder-owners of the most successful firms do take home several hundred million dollars annually, much more than top Wall Street executives. Reporting from the epicenter of this gold rush, the Stamford Advocate observed recently that six local hedge-fund managers pocketed a combined $2.15 billion in 2005. Such payouts are the result of hedge funds' unique fee structures, which combine large annual management fees with a share of annual investment profits.

But the sophisticated investors who pay such fees do so voluntarily, because they believe that the returns they will receive will more than compensate for those fees. Hedge-fund managers who do poorly or do not outperform relevant indices will soon have no money left to manage: in 2005, 848 hedge funds went out of business. And high performance fees can be less corrupting than the alternative. Since they rely only on management fees, for example, mutual-fund companies have an incentive to focus on boosting the volume of the money under their management rather than on their investment performance.

The extraordinary earnings of the top hedge-fund managers reflect the workings of a daunting star system. Every year, hundreds of smart analysts sign up to join the industry, just as thousands of aspiring movie stars arrive in Hollywood. Only a few do enough to justify the high fees charged: come up with an insight into how a certain company or currency has been mispriced, see illogical discrepancies between the prices of sets of financial assets, and so forth. And those who do come up with such breakthroughs not only make fortunes for themselves and their clients. By buying irrationally cheap assets and selling irrationally expensive ones, they shift market prices until the irrationalities disappear, thus ultimately facilitating the efficient allocation of the world's capital.

If some are concerned about hedge-fund managers' compensation, others are concerned about their integrity. Arguing for its rule requiring hedge-fund advisers to register themselves and be subject to inspections, the SEC cited 51 fraud cases involving hedge funds between 2000 and 2004 and claimed that at the time of the rule's adoption, in 2004, 400 hedge funds and at least 87 hedge-fund advisers were under investigation.

An industry of around 9,000 hedge funds is indeed bound to harbor some criminals. But insider trading is already illegal, and prosecutors have the tools to go after offenders in hedge funds without new regulations. The number of fraud cases suggests that regulators are not shy about using these powers, and hedge funds regularly experience inquiries from the SEC when they happen to trade heavily in a stock ahead of a price-moving announcement. Moreover, some of what politicians and journalists label "hedge-fund abuses" involve leaks of inside information from investment banks rather than from hedge funds, making the hedge-fund managers who receive the leaks accomplices rather than the chief offenders.

Still other critics attack hedge funds for the consequences of their buying and selling decisions. Thus, Germany's deputy chancellor compared hedge funds to locusts because of their role in hostile takeovers of German companies, and some Britons vilified George Soros because his hedge fund upended the British government's economic policy in 1992. And after the East Asian crisis in the late 1990s, Malaysia's prime minister, Mahathir bin Mohamad, lamented that "all these countries have spent 40 years trying to build up their economies and a moron like Soros comes along with a lot of money to speculate and ruins things."

The common assumption underlying such criticisms is that politicians know and seek the public good, whereas market forces, represented here by hedge funds, seek only profits, without regard to any costs or consequences that might follow. But German politicians' objections to hostile takeovers have little to do with any rational conception of the public good, and a lot to do with their cozy relationship with incumbent captains of industry. And although the European Exchange Rate Mechanism (ERM) may have appealed to British Prime Minister John Major, anxious to differentiate himself from his Europe-bashing predecessor, Margaret Thatcher, his country's membership in the ERM made no economic sense after Germany refused to raise taxes to pay for unification, thus generating interest rates high enough to threaten recession in the United Kingdom. By betting against the pound and helping to destroy the ERM, Soros ended up making money not by economic vandalism but by liberating Britons from their leaders' unsustainable choices. As the economist Melvyn Krauss and the former hedge-fund manager Michael Simoff have written, hedge funds may be a disruptive force -- but they disrupt what needs disrupting.

Hedge funds are sometimes accused of destabilizing capital markets. This is the fear that goes back to the collapse of Long-Term Capital Management: that the implosion of a major hedge fund could be devastating not merely for its investors but for the broader financial system as well. Regulators in both the United States and Europe have expressed some variant of this worry, and not without reason. But the dangers created by hedge funds need to be balanced against the many ways in which the funds actually reduce risk.

Contrary to popular mythology, hedge funds are not precipice dwellers. In the United States and Europe, regulations restrict access to hedge funds to rich individuals and institutions on the theory that the funds are too risky for the average investor. But because most hedge funds hold a portfolio of positions and can go short as well as long -- borrowing stocks and selling them, in the hopes of buying them back after their prices have fallen -- they can be less volatile than individual stocks or standard mutual funds. After the technology bubble burst, investors discovered that holding supposedly sedate stock-index funds could make for a bumpy ride; meanwhile, hedge funds as a group delivered strong positive returns over the period. The best way for large investors to avoid the precipice is to hold a diversified portfolio of investments, in which hedge funds can certainly play a part.

Moreover, hedge funds collectively do not so much create risk as absorb it. The funds can be viewed as quasi insurers; by shouldering risks that others wish to avoid, they remove a potential obstacle to business. For example, banks have to limit their lending for fear that borrowers might default. But hedge funds are willing to buy credit derivatives that transfer the default risk from the banks to themselves -- freeing the banks to finance more economic activity. Similarly, companies may reduce their cross-border activities if there is a limit to the foreign currency exposure they are willing to take on. Hedge funds help to manage that exposure by trading in the currency derivatives that companies use to insure themselves.

Hedge funds can also reduce the danger that economies will overrespond to shocks. If a currency or stock market starts to plummet, the best hope for stability lies in self-confident, deep-pocketed investors willing to bet that the fall has gone too far, and hedge funds are well designed to perform this function. Whereas mutual-fund managers must be cautious about bucking conventional wisdom because the returns they generate are measured against market indices that reflect the consensus, hedge funds are rewarded for absolute returns, which allows their managers to engage in independent thinking. Moreover, many hedge funds have "lock-up" rules that prevent investors from withdrawing money on short notice; when crises strike, the funds have the freedom to be buyers.

This does not mean that they will extend a safety net every time a market falls. But in 1988, the Brady Commission report on the stock-market collapse of the previous year found that hedge funds had been net buyers during the crash. And contrary to Mahathir's fulminations, it was banks that caused the flight of "hot money" from East Asia during the 1997-98 crisis -- with hedge funds being among the first to go back in.

Finally, hedge funds can reduce the chances that markets will rise to unsustainable levels in the first place. Unlike most other investors, they can profit from falls in the market as well as from rises. Their ability to short stocks has given rise to a cottage industry of specialist funds that scour the financial press for glowing corporate profiles and bet against the hype. Hedge-fund managers can make mistakes or fall prey to groupthink, just as anybody else can, but they have greater flexibility and more incentives than other investors to buck trends rather than follow them.

If hedge funds reduce and manage risk in all these ways, what of the systemic risk that concerns regulators? That risk is real -- but restrictions on hedge funds are the wrong way to deal with it.

From a policy perspective, it does not matter if one hedge fund goes down. The fund's investors take a hit, but they were presumably aware of the risks all along. Ordinary citizens may be increasingly exposed to hedge funds via their retirement plans, as Senator Grassley says, but large corporate pension funds allocate on average only about one percent of their assets to hedge funds, so that exposure is trivial. What matters is whether a collapse has knock-on effects, particularly for the banking system more generally.

Banks are exposed to hedge funds in part because they lend to them. When Long-Term Capital Management collapsed in 1998, it emerged that banks had lent it enough to be left with significant losses. But the answer to this problem is not to regulate hedge funds but to do better at supervising the already regulated banks. This is what the Federal Reserve Bank of New York and its European counterparts have done. Since Long-Term Capital Management's collapse, banks have lent hedge funds only money that the banks could afford to lose. In the late 1990s, hedge-fund borrowing peaked at about 2.5 times capital (meaning that every dollar in the sector was supplemented by an additional 2.5 dollars of borrowed money); today, according to JP Morgan, the borrowing amounts to only a little more than the capital in the sector.

Banks are also exposed to the possibility that trouble at one hedge fund will create trouble at others. Hedge funds tend to invest on margin: they borrow money so that they can buy stocks, bonds, or various derivative contracts, and the lending banks then retain those financial instruments as collateral. If an investment loses value, the bank issues a margin call, demanding that the hedge fund pony up fresh capital to replenish the collateral; this can force a fund to sell its holdings just as they are losing value. If a hedge fund is a big player, the pressure of its selling could potentially drive prices down further -- triggering another round of margin calls and another round of forced selling. If such a vicious cycle drove down the value of a particular part of the market, others who invested in it could also see their assets wiped out.

The nightmare scenario involves a host of hedge funds making similar bets. If the bets turn out to be wrong, a fund could unravel, causing the others to unravel in turn -- and banks that could comfortably swallow the default of one or two funds might find themselves overwhelmed by the default of dozens. The banks themselves, moreover, may have made similar bets through their own proprietary trading desks, meaning that their own capital would be taking a hit just when it was needed to cushion losses on hedge-fund lending. When Timothy Geithner, the president of the New York Federal Reserve Bank, sounded a warning about hedge funds this past September, this is what was worrying him.

Geithner was not, however, saying that the nightmare scenario is likely. In financial markets, there has to be someone on both sides of each trade; if a group of hedge funds is betting heavily on a fall in energy prices or the convergence of Latin American interest rates, somebody else must be betting just as heavily on the opposite outcome. Viewed globally, this system of wagers is a giant zero-sum game. In order to be worried, you have to believe that one side of some risky bet is concentrated in a particular corner of the financial system, and that it could collapse without the other parts of the system coming to the rescue.

Such a possibility is real, but it does not justify a clampdown on hedge funds. To the contrary, the proliferation of hedge funds actually diminishes the risk of the nightmare scenario, and so regulation that discouraged the creation of new funds would be counterproductive. The more hedge funds there are, the less likely it is that they will all be concentrated on one side of a given trade, and the more likely it is that if trouble at one hedge fund initiates a downward spiral in a particular corner of the market, falling prices will draw in other funds smelling a bargain.

This is precisely what happened after Amaranth's collapse this past September: the fund had to sell its positions fast, and others (including other hedge funds) were only too happy to accept the resulting discount. Because they are global, opportunistic, and nimble, hedge funds are likely to pile into any market where the distress of other institutions creates anomalous pricing.

It is true that if hedge funds become very large, they pose a more serious risk. If Amaranth had lost $26 billion rather than $6 billion, it might have been harder for other market players to take over its trading positions. Troubling concentrations of risk can occur within banks as much as within hedge funds: part of the nightmare scenario lies in the direct risk to the banks from their own proprietary trading desks, and banks such as Morgan Stanley have been building up their asset-management business by buying stakes in hedge funds. But imposing some arbitrary regulatory cap on the size of hedge funds would unjustly penalize successful firms. The best safeguard against the risk posed by large funds is the presence of other large funds.

If it is wrong to discourage the formation of new hedge funds and wrong to impose a limit on funds' size, what of other possible regulatory options? Some call for limits on funds' borrowing. But that might curtail their ability to act as opportunistic buyers in a crisis: it would ration the fire fighters' access to the fire hydrants.

Others call for more disclosure, which would allow lenders and regulators to gauge whether funds are crowding dangerously onto one side of a particular trade. But periodic snapshots of a fund's positions might reveal little if it trades intensively, and even extensive disclosures can fail to reveal a fund's real risks. In a 2005 paper for the National Bureau of Economic Research, Nicholas Chan, Mila Getmansky, Shane Haas, and Andrew Lo demonstrated how a hedge fund could report strong and consistent returns over 96 months and still present a risk of sudden implosion. A further reason to be cautious in demanding disclosure is that hedge-fund privacy can serve a useful purpose. Without a right to privacy, funds could not be sure of capturing the value of their intellectual property, as there is no patent protection for trading strategies. Forcing disclosure indiscriminately on all funds could thus damage their incentive to discover and correct market inefficiencies.

Rather than forcing more disclosure, it would be better to allow the market to promote it. As the hedge-fund industry has grown, it has gradually become more transparent. Brokers that supply leverage to hedge funds have grown more insistent on understanding their clients' risks. Proliferating funds of funds demand at least a general description of their exposure from the hedge-fund managers to whom they entrust capital. These pressures give hedge funds an incentive to disclose more than they have in the past, since the more they reveal, the more readily they can raise capital. And in some cases, funds may choose to reveal a lot. In November, Fortress Investment Group, which manages private equity funds and hedge funds, took the radical step of seeking a public listing, with all the disclosure requirements that come with it. Other funds may decide that secrecy is so important to their business model that it is worth accepting higher costs of capital, and they should be free to make that judgment.

In the end, the critics of hedge funds would do well to remember why this sector has emerged as such a force. Until the late 1960s, the financial world was quaintly stable: exchange rates were inflexible, interest rates were regulated, and the whole system was anchored by a fixed gold price. But that world collapsed when inflation drove the dollar off the gold standard and currencies and interest rates began to float; from then on, it became impossible to amass savings without facing financial uncertainty. Tools for coping with that uncertainty -- deep markets in futures, options, and other derivative instruments -- sprang up in response to the newly volatile environment. And hedge funds emerged as the masters of these tools, providing quasi insurance to investors and firms and introducing a healthy dose of contrariness into financial markets. For this, they are accused of generating risk. But their real systemic function is to manage it -- and it is their very success in doing so that has generated both their profits and their phenomenal growth.

Following up on his excellent article in Foreign Affairs
[http://www.freedomandprosperity.org/blog/2006-12/2006-12.shtml#181], Sebastian Mallaby comments in the Wall Street Journal about how hedge funds help the economy in part because they operate in a laissez-faire environment. Not surprisingly, this upsets politicians. Reuters reports on the increasing appetite for regulation and control, led by the International Organization of Securities Commissions. Representing the interests of politicians and government rather than consumers and investors, IOSCO is pushing regulation at both the national and international level:

The European Central Bank called for new regulation of hedge funds, including American ones. Germany's government declared that hedge fund oversight would be on the agenda when it hosts next year's Group of Eight meetings. Not to be outdone, the U.S. Securities and Exchange Commission proposed a rule that would bar all but the wealthiest 1.3% of households from investing in these demon vehicles. How to explain all this suspicion? Hedge funds are simply pools of money whose managers are paid according to performance. This system of rewards is no more sinister than the patent system, which spurs inventors with the prospect of fabulous profits. Like intellectual property laws, hedge fund performance fees have created some impressive fortunes. Like intellectual property laws, they have inspired innovation, too. In their ceaseless search for profits, hedge funds have sought out inefficiencies on the financial frontier. After Hurricane Katrina, some traditional insurers recoiled from covering offshore structures, a classic example of overreaction to a bad event. Hedge funds hired academic climatologists, crunched the numbers and made a tidy profit by underwriting storm risk.
...What's not to like about all this invention? Hedge funds stand accused of being risky --hence the SEC's proposal to raise the bar for investing in them from the current $1 million in assets (including primary residence) to $2.5 million in assets (excluding your home). But investing in hedge funds is not actually riskier than another practice that the SEC condones cheerfully: investing in individual stocks. In the 10 years ending in August 2006, according to one calculation, an investor who put his money into the stock of a randomly chosen company and kept it there for a month had about 12 chances in 10,000 of losing half or more of his stake. Over the same period, a randomly chosen hedge fund would have been six times as safe.
http://online.wsj.com/article/SB116656987968554987.html?mod=opinion&ojcontent=otep (subscription required)

Michel Prada, a senior member of the International Organisation of Securities Commissions (IOSCO), told the European Parliament that hedge funds made markets more efficient but presented several risks. IOSCO is a global umbrella group of national market regulators that forges common standards. Systemic risk and price manipulation were just two dangers, Prada told the parliament's economic affairs committee. "The third risk is of shareholder activism that is carried perhaps too far. As such it translates into an impact on the corporate governance of listed companies," said Prada, who also chairs France's Autorite Des Marches Financiers (AMF). ... Earlier, European Central Bank President Jean-Claude Trichet repeated his call for possible regulation. ... The European Union's top market regulator, Internal Market Commissioner Charlie McCreevy, has rebuffed calls for new EU-level rules on hedge funds. McCreevy believes hedge funds keep company management on their toes, to the dismay of lawmakers.
http://today.reuters.com/news/articleinvesting.aspx?type=companyNews&storyID=164565%2020-Dec-2006%20RTRS&pageNumber=0&imageid=&cap=&sz=13&WTModLoc=InvArt-C1-ArticlePage3
Link to this Blog Entry

Tom Starkweather/ Bloomberg News
Phillip Goldstein was an unknown hedge fund manager at Bulldog Investors until he sued the Securities and Exchange Commission.

Hedge fund managers, let us toast the triumphs and travails of your secretive world as the year draws to a close.

Already I can hear some of you yelping. You hate being called secretive. You insist that it is federal laws that prohibit you from talking to the public, and in fact you would like the world to know more about you (except who you are, what you trade and what kind of returns you have generated).

In 2006, however, some of you discovered the one thing more valuable than your secrecy: permanent money. The Fortress Investment Group, which runs both hedge funds and private equity funds, and Citadel, a multi-strategy hedge fund, both filed prospectuses this year to offer securities to the public. To some, this is preferable to raising more money from investors in the fund because they can redeem their money, with certain restrictions, when they want.

The trend to lock down permanent capital gained even more traction abroad. Funds and funds of hedge funds raced to market, ready to sop up all demand for investments deemed alternative. Exchanges in Britain and Amsterdam raised $4.2 billion in 2006, compared with $454.2 million in 2005, according to Dealogic.

That outpouring of money into hedge funds mirrors another trend in hedge-fund land: that institutions like pension funds and endowments continue to dump money into the sector. But that means hedge funds are themselves becoming institutions, real grown-up businesses, with offices around the globe and extensive legal teams, rather than a few traders and a Bloomberg terminal.

Institutional or not, hedge funds are still more colorful, more outrageous, more impressive and more bizarre than other asset managers. They are the new, new money thing. And they deserve special recognitions of their own.

THE HOUDINI AWARD To Amaranth Advisors and its founder, Nicholas Maounis, for overseeing the evaporation of $6 billion in less than one week at the hands of a 32-year-old Ferrari-driving energy trader. Amaranth had been a respectable fund; investors loved it for its high returns and energy exposure, until the high returns turned into epic losses and its energy “exposure” turned out to be a bunch of concentrated bets on the direction of natural-gas prices (bets that did not work out well).

Soon after $6 billion went poof, Mr. Maounis tried to pull a rabbit out of his hat. On a brief, carefully lawyered phone call with investors, Mr. Maounis suggested that he intended to win back the trust and faith of his investors. “We have every intention of continuing in business generating for our investors the same consistently high risk-adjusted returns which have been our hallmark.” Right.

THE BETTER-THAN-BARINGS BLOW-UP AWARD Amaranth’s energy trader, Brian Hunter, blew through more cash in less time at Amaranth than, well, than anyone I can think of. When Nicholas Leeson, a young trader at Barings Bank in Singapore, blew up Barings, he burned through $1.3 billion. When Long Term Capital Management imploded in 1998, its $4.8 billion quickly shrank to $600 million (although enormous leverage magnified the losses and brought the financial system to its knees). Bayou lost $460 million, $100 million less than Amaranth lost on Sept. 14.

THE BRAVEHEART AWARD Phillip Goldstein was an unknown hedge fund manager at an unremarkable hedge fund, Bulldog Investors, until he sued the Securities and Exchange Commission, contending that the agency did not have the authority to regulate hedge funds, and won. As a result, the court vacated the controversial registration requirement and left the S.E.C. with little authority over hedge funds.

The S.E.C. is now contemplating a rule that will prohibit all but 1.3 percent of Americans from investing in hedge funds. It also rewrote a fraud provision that at least allows it to go after, well, fraud.

THE DEBUTANTES AWARD The Citadel Investment Group filed a prospectus to raise as much as $2 billion in bonds, a creative financing strategy that when accomplished, makes Citadel slightly less dependent on Wall Street and slightly more similar to a normal company that has various forms of debt. The Fortress Investment Group also announced its intention to sell shares to the public. The upshot from its offering documents? The people running alternative investment groups make boatloads of money.

THE GRETA GARBO AWARD She just wanted to be left alone. So did Christopher Hohn, the founder and brainpower behind the Children’s Investment Fund, a $9 billion activist fund based in London that donates a portion of its fees to a foundation run by Jamie Cooper Hohn, Mr. Hohn’s wife. When provided an opportunity to talk about the fund’s charitable work, neither Hohn returned any calls — those who did answer phones would not acknowledge that a foundation existed; yet, in June, former President Bill Clinton spoke at a fund gathering and praised the foundation.

THE BUYER BEWARE AWARD Shakespeare questioned the power of a name and so should investors. Viper Capital Management, a fund in San Francisco, has been sued by the Securities and Exchange Commission for fleecing investors out of $5 million. Pirate Capital, whose letters to investors discuss “treasures” and “shipwrecks” accompanied by matching pictures, suffered a mutiny of talent and disappointing returns (5 percent through November for the flagship Jolly Roger fund). Investors not tipped off by the name perhaps should have been warned by a New York magazine article that featured one of the fund’s 27-year-old analysts, a former snowboarding champion, yelling at a chief executive that he was the boss. Capt. Jack Sparrow take heed.

THE $100 MILLION WEEKEND AWARD On a Friday in November, a $13 billion fund, Atticus Management, owned or controlled through options 9.9 percent of Phelps Dodge. Two days later, when Freeport-McMoRan Copper and Gold announced that it would acquire Phelps, Atticus made over $510 million. That number understates the fund’s real return, which is based on its previously acquired stake, done when the stock was cheaper. Since hedge fund managers take 20 percent of the profits, Timothy Barakett, Atticus’s founder and lead manager, made more than $100 million. New television series: Who Wants to Be a Decamillionaire?

THE HYPOCRITE’S AWARD For all the talk about wanting to be more open, a lot of you are still secretive. One of you stopped me on my way into your Greenwich, Conn., offices and insisted: “You were never here, right?” I joked that such metaphysical requests were beyond my abilities. Upon gaining entry into your secret kingdom, you suggested the press was unfair, perhaps even inaccurate, for calling hedge funds secretive.

Massachusetts securities regulators are investigating office-space leasing and other business arrangements between Boston hedge funds and Swiss banking company UBS AG. Investigators have requested documents and are planning to take sworn testimony in what could be a broader examination of what have come to be known as "hedge-fund hotels."

In such set-ups, big investment houses offer office space and other services to hedge funds, lightly regulated investment partnerships geared toward wealthy investors. Hedge funds are valuable clients for brokers because they often trade rapidly and pay high commissions.

Massachusetts Secretary of the Commonwealth William Galvin, who oversees the state's Securities Division, said he suspects that hedge funds are paying below-market rates to lease offices -- or even, no rent at all -- and then returning the favor by paying higher-than-average commissions. Mr. Galvin said he would want to know if any such deals had been disclosed to hedge-fund investors, whose money is used to pay those commissions. The New York Times reported on the Massachusetts investigation yesterday.

Mr. Galvin said he also worries that such relationships create a potential "conflict of interest" that could put other brokerage-firm clients at a disadvantage in the financial markets. "Are there special privileges being afforded to certain customers?" Mr. Galvin asked. "Do these special relationships come at the expense of ordinary investors?"

Rohini Pragasam, a UBS spokeswoman, declined to answer questions about the company's real-estate relationships with hedge funds but said, "We are assisting the state with their request for information."

Mr. Galvin said his inquiry was "in the very early stages." He said he expected the inquiry to broaden to the activities of other investment houses besides UBS. Mr. Galvin noted potential similarities between hedge-fund hotels and arrangements between hedge funds and brokers that were at the heart of the trading scandal that engulfed the mutual-fund industry several years ago and led to civil fraud charges from Massachusetts and other regulatory agencies. In those cases, brokers, as well as money-management firms, helped hedge funds to skim profits from rank-and-file investors by circumventing rules against the frequent trading of mutual funds, regulators said.

Hedge-fund and private-equity firms fiercely guard their privacy and have little interest in wooing small-fry investors, right? Not anymore.

• The Issue: Hedge funds and private-equity firms are increasingly selling stocks and bonds.
• What's at Stake: Raising capital from public markets enables these firms to be less dependent on private investors.
• Impact on Investors: These shares provide diversification, but there are clear drawbacks.

Firms increasingly are providing some juicy details about their operations as they issue stocks and bonds to the public. But it isn't clear whether investors should be eager buyers.

For hedge funds, the allure of these securities offerings is "permanent capital," or money that can't be withdrawn on a quarterly or annual basis. That is, once a firm has sold shares in an initial public offering, any investor who later wants to sell his or her stake can trade the shares on an exchange, but the firm itself doesn't have to worry about sending money out the door.

As hedge funds make more long-term investments, they want to make sure that investors don't withdraw money before the bets reach fruition. Raising public capital also enables hedge funds to be less dependent on their bank lenders. Permanent capital also is attractive to private-equity firms, which usually have to return money to investors when they wind down a buyout fund.

Raising capital in the public markets can enable them to avoid a new round of fund raising, which can be more cumbersome than an IPO. Courting the public is part of a growing shift by large hedge-fund and private-equity firms to become more "institutional" -- to look more like diverse investment banks -- in order to bring more stability and profits.

In November, Fortress Investment Group, a $29 billion private-equity firm, announced plans to sell shares to the public. In December, a unit of Citadel Investment Group, a $13 billion hedge fund, privately sold $500 million of unsecured bonds. Nineteen private-equity and hedge-fund firms sold shares in 2006, raising $12.4 billion, up from 10 firms raising $1.7 billion in 2005, according to data tracker Dealogic.

A number of major firms currently are examining ways to tap the public market, investment bankers say. There also is a growing group of publicly traded "special purpose acquisition companies," or SPACs, that use cash raised through IPOs to acquire private companies, often from private-equity firms. In 2006, 40 SPAC IPOs raised about $3.3 billion, compared with 29 raising $2 billion in 2005, according to Dealogic.

For investors, these shares are a chance to move into alternative investments, an area that often generates returns that don't correlate with the overall stock and bond markets. Public offerings also enable investors to easily buy and sell their stakes, while avoiding the high minimum investments and net-worth requirements usually necessary to invest directly in these kinds of firms.

The shares provide "cheap diversification" for investors, says Robert Discolo, managing director at AIG Global Investment Group, a unit of AIG that invests more than $7.5 billion in hedge funds. But there have been sizable bumps in the road for firms racing to the public markets. In May, Kohlberg Kravis Roberts & Co. listed a fund that raised a heady $5 billion through a share listing in Euronext Amsterdam.

The KKR fund's shares quickly traded below their issue price, and now are more than 7% below the IPO price. The shares give investors fewer rights than the private-equity firm's limited-partner investors receive. Apollo Management LP raised $1.5 billion by floating its AP Alternative Assets LP fund, but raised 1 billion less than it originally intended. Soon after, some private-equity titans -- including Doughty Hanson -- said they would shelve plans to list funds. Swedish private-equity firm EQT Partners AB also set aside preliminary plans to list a fund, according to one person familiar with the matter. EQT didn't return calls.

Because some of the biggest and most prominent private-equity and hedge-fund firms seem to have little trouble raising money outside the stock market, it may well be "some of the lesser names [that] make the move toward going public," predicts Michael Napoli, who runs absolute Return Group, a Los Angeles-based hedge-fund advisory firm.

Many hedge funds are reluctant to disclose details of their operations as others become more open. Securities filings in connection with Citadel's bond offering, for example, told investors that as of Aug. 31, the fund held borrowed money that amounted to a sizable 7.8 times the firm's assets. Citadel also provided details about recent hires. One worry for investors in these shares: so-called cash drag. Private-equity funds often need to wait before they see an opportunity to invest money, so cash raised from a public offering can sit around, often earning little more than interest, while the managers still collect fees.

Hedge funds have had a better run of luck in public markets. Bankers say this is partly because hedge funds can invest proceeds more quickly, plowing the cash into stocks, bonds and derivative markets, if they wish. Still, these types of listings are considered too risky or hard to value by some investors.

Many mutual-fund managers dislike giving money to other fund managers to manage; they prefer more control over how their money is put to use. And some stocks that focus on acquiring interests in other companies, such as CMGI Inc., have had a poor history. CMGI, which invested in a slew of technology companies in the late 1990s, saw its shares rise from below $5 a share to more than $160 in 2000, before plunging to just over $1 today. So bankers are reaching out to life insurers and pension funds looking to increase their exposure to alternative investments. Sometimes these firms are more comfortable with investing in listed securities than with putting money in a hedge fund directly.

The Bank of England wants London-based hedge funds to agree a voluntary code of conduct to encourage greater transparency and provide better governance in the contentious industry.
Like other financial authorities around the world, the Bank is concerned that another Long-Term Capital Management, whose collapse in 1998 sent shock waves through the global financial system, may be waiting to happen.

But rather than go for heavy-handed regulation of such funds, which could push many out of their plush Mayfair offices and into other countries, British financial authorities are keener on the lighter touch of a voluntary code.

City sources said preliminary discussions between the Bank and hedge funds have centred round developing an industry-sponsored code of good practice. This would probably focus on disclosure and governance issues. It would not try to establish any kind of central register of balance sheet positions, which is the option favoured by other countries such as Germany. The Bank of England declined to comment other than to say it was important that such a code be driven by the hedge funds industry itself.

Alastair Clark, adviser to the Bank governor, Mervyn King, said: "We think this is a worthwhile idea which deserves to be explored further. The hope would be that, in an inversion of Gresham's Law, good practice would drive out bad."

The Bank is no longer responsible for regulation of financial services in Britain - that is now the job of the Financial Services Authority - but it has ultimate responsibility for the stability of the financial system, which leads to its concern about the potential instability caused by the collapse of a major hedge fund.

Hedge funds work by taking positions in all kinds of financial instruments and markets, generally using funds from wealthy investors topped up by huge amounts of money borrowed from banks. In the jargon they are known as "highly leveraged" institutions and are estimated to wield about $1.5 trillion (£780bn).

On the one side are people such as the renowned investor Warren Buffett who fret that there is too much borrowed money making risky investments across the globe. And on the other side the former US Federal Reserve chairman Alan Greenspan thinks hedge funds are an integral part of a stronger global financial system. Some prominent funds have recently collapsed with little impact across global markets.

But Germany, where a senior politician last year described two such funds buying into Deutsche Börse as "locusts", is using its position as chair of the Group of Eight leading economies this year to push for an international register of hedge funds' positions along with compulsory ratings of their investment strategies by independent agencies. It is supported by the European Central Bank.

The Bank of England is believed to think this would not be a useful strategy to ensure financial stability since the investment positions of hedge funds often change significantly from day to day. Therefore a report on their positions that was six months old, for example, would be out of date and of little use.

U.S. private-equity firms raised a record amount of money last year, with 322 funds collecting $215.4 billion.

With buyout firms pursuing larger acquisitions and institutional investors plunging ever greater sums into the asset class, U.S. private-equity firms raised 33% more capital than they did in 2005 and smashed the record set in 2000, when they raised $177.1 billion, according to Private Equity Analyst, a trade publication owned by Dow Jones & Co., which also publishes The Wall Street Journal.

"It's gotten to the point where there is so much perceived opportunity that it has created a momentum of its own," said Chris Douvos, co-head of private equity at the Investment Fund for Foundations, a money manager for nonprofit groups and charities.

Leveraged buyout firms, which purchase companies in hopes of selling them for a profit a few years later, raised $148.8 billion, or 69% of total U.S. capital raised. Taking advantage of cheap debt, they completed bigger acquisitions and blew through the capital in their funds at breakneck speed.

Nearly half of the money raised by leveraged buyout firms was collected by just eight firms that set up funds with $5 billion or more. Among them were Bain Capital, First Reserve Corp., Kohlberg Kravis Roberts & Co. and Texas Pacific Group. Blackstone Group, based in New York, is in the middle of raising a buyout fund that is expected to gather $20 billion, becoming the largest private-equity fund ever raised.

U.S. venture-capital firms accounted for just 11.7% of the total capital raised, with 119 funds raising $25.1 billion. Last year's fund-raising pace mirrored that of 2005, when 151 funds raised $25.7 billion.

Venture-capital firms used to represent a much bigger share of the overall industry, especially in 1999 and 2000, when they funneled money into hundreds of young Internet companies. But many investors have since soured on venture-capital funds and prefer to commit capital only to established managers.

Roughly 20% of the venture-capital dollars were raised by just two firms, New Enterprise Associates and Oak Investment Partners, both of which have started to invest in more-mature companies that carry less risk.

Private-equity firms are expected to maintain a robust fund-raising pace in 2007, fueled once again by leveraged buyout firms.

A truism of investing is that to beat the market consistently, an investor must either take above-average risk or trade on inside information. That inevitably casts a cloud over hedge funds, which exist to beat the market. Many fail, sometimes spectacularly so. But many succeed. The question is, How?

The Wall Street Journal reported that Eliot Spitzer was asking just that question. Shortly before he resigned as New York’s attorney general to become the governor, Mr. Spitzer opened investigations into whether employees at companies including Best Buy and Circuit City had improperly given nonpublic information to hedge fund managers.

Two research firms, the Gerson Lehrman Group and Vista Research, a unit of McGraw Hill, are also under investigation. They specialize in matching up people who have information — say, middle managers — with clients who crave information, like hedge funds managers. The firms collect fees from hedge fund clients and pay sources as consultants. Business for these firms has boomed since 2000, when federal regulators enacted disclosure rules that made executives at public companies wary of speaking privately with big investors.

It will be up to the prosecutors to determine if the matchmaking firms merely appear to be conduits for nonpublic information, or if they indeed are. The firms say they follow procedures to guard against any inappropriate disclosures.

But the safeguards seem weak. Gerson Lehrman told The Journal that it reminds its consultants not to divulge confidential or restricted information. A Vista spokesman said consultants must sign an ethics code that says they’re “never expected” to comment on their employer.

New York’s new attorney general, Andrew Cuomo, should pursue any wrongdoing. And the new Congress should move forward with hedge fund regulation. The possibility of a destabilizing meltdown only grows the longer the funds escape oversight.

So much so that two large portrait photographs of the senator by Chuck Close grace the hallway of her 1960s-themed penthouse apartment on Sutton Place in Manhattan.

“It’s a beautiful picture because Hillary is beautiful,” said Ms. Perry, a top Democratic fund-raiser, whose husband, Richard, runs a prominent $12 billion hedge fund. “I will be there for her emotionally, and I will raise.”

There are no Pop Art portraits of Rudolph W. Giuliani in the home of Paul E. Singer, a longtime hedge fund executive and a primary fund-raiser and policy adviser to Mr. Giuliani, but his support is no less ardent.

Hedge fund money, which now exceeds $1 trillion, has emerged in the last several years as a potentially powerful force in politics, as underscored by the significant role it is playing in the presidential aspirations of Mrs. Clinton and Mr. Giuliani. During the 2006 election cycle, executives who work at the 30 biggest hedge funds made $2.8 million in contributions to political candidates or party committees, almost double the amount in 2000.

Yet it is not just the money they donate directly that makes people in hedge funds attractive to campaigns. They also offer access to other potential donors in the financial world, which in recent election cycles has become one of the biggest sources of political contributions. That pipeline has made it easy for well-connected candidates like Mrs. Clinton, Mr. Giuliani and Senator John McCain to consider forgoing public funding. (Mrs. Clinton has done so; Mr. McCain is expected to opt out; and Mr. Giuliani has not yet addressed the topic.)

And top candidates for the 2008 campaign are expected to raise a lot of money quickly — at least $100 million each by the end of this year by some estimates.

“Are hedge fund guys going to be happy with their art collections and their houses in Greenwich or are they going to take the next step?” said Byron R. Wien, the investment strategist at Pequot Capital. “As Hollywood once invaded politics, you will see the same with hedge funds.”

Money from Wall Street has long been a factor in Washington and has tended to flow, with a policy agenda, to the ascendant political party. Giving by people in hedge funds, on the other hand, tends to be more personal and ideological. Some of the most aggressive donors have been Democratic supporters like George Soros, David E. Shaw of D. E. Shaw and James H. Simons at Renaissance Technologies, as well as younger executives like Thomas F. Steyer at Farallon and Marc Lasry at Avenue Capital, all of whom gave generously during the 2006 election cycle.

While hedge fund money appears to be tilting toward Democrats of late, Republican donors like Julian H. Robertson Jr., the founder of Tiger Management, who has given more than $700,000 over the last three cycles, and Bruce Kovner at Caxton Associates have backed their party’s candidates and causes.

Still, compared with the billions of dollars that hedge fund magnates have spent on art, mansions and other extravagances, these political donations are a pittance, held in check by federal finance laws that limit personal contributions to $2,100 and by a general reluctance to step into the public limelight.

But with the rapid growth of their money and stature, an increasing number of the hedge fund wealthy are not just putting their money to work, they are forging personal and professional ties with a generation of politicians who have come to spend as much time raising money as they do drafting legislation.

After all, the essence of the industry’s success has been its unregulated status and secrecy, so hedge fund titans must weigh the thrill of proximity to political power with the increased public scrutiny that inevitably follows.

The connections can take different shapes and forms. For John Edwards, the Democratic presidential candidate, the 14 months he spent as a paid senior adviser at Fortress Investment, a $29.7 billion hedge fund and private equity firm, helped him to bond with the fund’s liberal-leaning executives, several of whom have given money to Mr. Edwards.

As to what Mr. Edwards, a trial lawyer with no previous financial markets experience, did at Fortress, an adviser to the candidate said that Mr. Edwards “advised on where there might be investment opportunities and where he saw the global economy going.” Mr. Edwards resigned from Fortress last month before declaring his candidacy.

And Avenue Capital, a $12 billion fund run by Mr. Lasry, a prominent financial supporter of the Clintons, hired their daughter, Chelsea, last year.

Mr. Singer and Ms. Perry represent different sides of the same coin. Mr. Singer, 62, is the founding partner of Elliott Associates, a $7 billion hedge fund with a conservative, risk-averse bias that has been in business since 1977, making it one of the oldest funds around. A reserved, private man who would answer questions only via e-mail, Mr. Singer is a self-described conservative libertarian who has given millions of dollars to Republican organizations that emphasize a strong military and support Israel.

They include Progress for America ($1.5 million in contributions), a political advocacy group set up to advance the policies of the Bush administration; Swift Vets and P.O.W.’s for Truth; and the Jewish Institute for National Security Affairs, which includes Vice President Dick Cheney and Richard N. Perle, an adviser to the former Defense Secretary Donald H. Rumsfeld, among its past and current advisory directors.

Mr. Singer said that his support for Mr. Giuliani sprang from an appreciation of Mr. Giuliani’s work as mayor. “Rudy’s stewardship is primarily responsible for making New York one of the greatest cities of the world,” he said.

A trustee at the Manhattan Institute, the conservative policy group that has been a source of many of Mr. Giuliani’s core policies, like welfare reform and a focus on quality-of-life issues, Mr. Singer sees Mr. Giuliani as the “strongest, most conservative candidate in the race.”

While Kenneth G. Langone, a co-founder of Home Depot, held Mr. Giuliani’s first public fund-raiser last month, a campaign strategy notebook that was leaked to The Daily News of New York this month pointed to Mr. Singer as the locus of Mr. Giuliani’s fund-raising network. “I will be raising money for Rudy in professional and personal circles,” he said.

Asked to describe his political philosophy, Mr. Singer says his conservatism dates back to Barry Goldwater and is founded on free enterprise and a belief that the government should “not be taking from one person and giving to another.” He abhors what he calls social engineering and he has financially supported state propositions that advocate preventing state agencies from collecting racial information.

He believes in the doctrine of American exceptionalism and is wary about United States involvement in “international organizations and alliances.” As for the war in Iraq, he said, “America finds itself at an early stage of a drawn-out existential struggle with radical strains of pan-national Islamists.”

In an industry known for its secrecy, Mr. Singer keeps a particularly low profile. He does all that he can to keep his picture from appearing in the media and does virtually no marketing for his fund, which had a return of 17 percent last year. Given his wealth, his disposition is frugal.

“He is not a trophy collector,” said Lawrence Simon, the co-founder of Ivy Asset Management and an investor with Mr. Singer for more than 25 years. “I don’t even know if he has a second abode. He is very quiet in the way that he carries himself.”

A graduate of the University of Rochester and Harvard Law School, Mr. Singer practiced law before he began to dabble in what was then an obscure investment strategy called convertible arbitrage. By buying convertible bonds and selling the attached stock short — or betting that its price would fall — he realized that he could achieve a decent investment return in up and down markets.

Steeled by the bear markets of the 1970s, he worries that managers may have become punch-drunk from a surfeit of happy investment times. “I am struck by the size of the hedge fund community and the amount of money being managed by people who have little experience in risk management and adverse market environments,” he said.

In contrast to Mr. Singer’s quiet approach, Ms. Perry’s embrace of Mrs. Clinton has taken on a more celebratory cast. She has tapped New York’s art world for fund-raising parties and opened up her Long Island house, in Sag Harbor, for gatherings for the senator.

Over the last three election cycles, Ms. Perry, 48, has given more than $1 million to Democrats, putting her in the most elite tier of Democratic donors. Given that she wrote her first check in 1998, when she was a stay-at-home mother, it has been a rapid evolution and one that has been fueled by her belief that there are not enough women senators in Washington. Her litmus issue is a woman’s right to an abortion and it is what first attracted her to Mrs. Clinton in 1999.

Now she considers her a personal friend. “We have a strong bond,” she said. “She is the smartest, the most worldly. I just think she would be the most fabulous president.”

She admits to getting a bit emotional at the thought of a woman in the White House. “I feel it so strongly,” said Ms. Perry, who is in the midst of starting her own line of Lisa Perry-branded clothing. “I’m a strong feminist so I really want it to happen.”

Mrs. Clinton’s advisers are quick to give Ms. Perry her due. “Lisa is an active, effective supporter,” said Alan J. Patricof, the finance chairman of Mrs. Clinton’s two Senate campaigns. “She is not a frivolous person.”

While her husband, Richard, is also a Democrat, Ms. Perry points out that her giving and fund-raising are driven by her own politics, not his. Still, he, too, is a supporter of Mrs. Clinton. “He thinks she is one of the smartest people he has ever met,” Ms. Perry said.

But it is her own largess that gives her a sense of pride. “Not a lot of women write their own checks,” she said.

Private investment firms have found a simple way to profit from the workings of public companies: Borrow their shares, and then swing the outcomes of their votes. In some cases, the strategy has allowed speculators to gamble that a company's stock will drop, and then vote for decisions that will ensure that it does -- without their ever having to own any stock themselves. Some outside interests have used the strategy to hide their voting power within a company until the last moment. Often, individual shareholders don't realize their own stocks, and their voting rights, have been borrowed from their brokerage accounts, until it's too late.

ON BORROWED TIME
• The Issue: Hedge funds can vote shares they don't own by borrowing them.
• The Stakes: Critics say shareholder elections are corrupted if investors who don't have an economic stake can vote.
• The Bottom Line: Regulators face difficulties if they try to curtail the practice.

Fueling the practice -- dubbed "empty voting" in a study by two University of Texas professors -- is a booming business in lending shares. That business has nearly doubled in the past five years, according to one report, and now earns $8 billion a year for big brokerages and banks plus an unknown amount for institutional investors. Voting rights are lent along with the shares, and increasingly, that is leading to unintended consequences.

Vote counters often fail to keep track accurately and let the borrowers and owners of the same shares both cast votes. Four big banks paid the New York Stock Exchange $2.35 million last year to settle charges in this area. Meanwhile, other shareholders often are unaware that a big voting bloc has no real ownership stake in the company -- and that it may vote directly opposite the wishes of the stock's actual owners.

This phenomenon has gotten the attention of regulators, who fear it is escalating just as shareholder voting is gaining importance as a way to improve corporate governance and keep management excesses in check. If elections can be too easily gamed, critics fear, a basic foundation of public companies -- that shareholders vote in the company's best interest -- will be undermined.

The practice "is almost certainly going to force further regulatory response to ensure that investors' interests are protected," Securities and Exchange Commission Chairman Christopher Cox said in an interview. "This is already a serious issue and it is showing all signs of growing."

The SEC has no firm plans yet. Britain's securities regulator, the Financial Services Authority, has begun a study into whether to force greater disclosure of large investors' stakes in companies, regardless of whether they own stocks or are just borrowing them. One of the largest pension-fund managers there, Hermes, has called for regulators to outlaw voting altogether by borrowers of shares. In Hong Kong, the Securities and Futures Commission said it is studying "issues relating to borrowed shares and voting."

The concern arises just as more companies are moving toward requiring a majority of all shares to elect directors, instead of simply a plurality of those casting votes. A recent U.S. federal appeals court decision opened the door to giving shareholders a greater say in the election and nomination of directors, and the SEC recently approved a rule to make it easier for investors to put up their own slates of directors. But the vulnerability of the voting system could set back such efforts. "It seems in trying to perfect corporate governance, we were polishing an apple that had a lot of worms inside, and we didn't know it," says Carol Hayes, corporate secretary of Coca-Cola Co., and a member of the Society of Corporate Secretaries and Governance Professionals.

The opportunity for "empty voting" arises when brokerage firms or institutional fund managers lend the shares they manage to hedge funds or other firms, for a fee that can rise with how difficult the shares are to get. The value of securities borrowed on any given day has reached $1.6 trillion after several years of double-digit growth, ccording to Astec Marketing Research Group Inc., a New York capital-markets research firm.

When it comes times for a shareholder vote, it's the borrowers that hold the voting rights. Under Delaware law, where most large companies are incorporated, voting rights belong to whoever holds the stock on a date the company chooses in advance of its stockholder meeting. It's as if in the U.S. electoral system, someone could borrow your voting rights and use them to vote in your place without your knowing it. Individual share owners often are unaware that contracts with brokerages normally allow the brokerages to make money by lending out stock if it's held in margin accounts, just as banks profit from lending their cash deposits.

The owners must ask for their stock to be recalled if they want to vote -- which means they would have to know the stock was lent and that the vote was coming. If their stocks are lent, the borrowers of the shares, not the owners, are supposed to receive invitations to vote. Stocks in cash accounts aren't affected.

No one knows how widespread "empty voting" is. Law professors Henry Hu and Bernard Black at the University of Texas at Austin have studied 22 instances world-wide from 2001 through 2006 in which either borrowed stock or hedging strategies, or both, were used. (See Messrs. Hu and Black's study.) Consider one example:

Henderson Land Development Co., Hong Kong's third-largest property developer, owned 73% of a subsidiary called Henderson Investment. It offered a rich premium in November 2005 to buy the rest. It had failed in a similar effort three years earlier, but this time it came back with a better offer. Under Hong Kong law, the deal would go through unless 10% of all the shares opposed it. Since the parent owned such a large stake and large institutions backed the deal, passage was considered a foregone conclusion.

Yet the acquisition was voted down early last year by a slim margin. Several market participants were quoted in news reports saying there was a surge in borrowed shares by at least one hedge fund ahead of the vote, compared with little if any lending in Henderson shares over the previous seven months.

By borrowing the shares and simultaneously shorting the underlying stock, the hedge funds gained the voting rights to squash the deal and stood to profit when the stock dropped 18% the next day. After the Henderson vote, the Hong Kong regulator said it was xamining voting practices. "It appears that one or more hedge funds borrowed Henderson Investment shares before the record date, voted against the buyout, and then sold those shares short, thus profiting from its private knowledge that the buyout would be defeated," the Texas professors wrote in the May 2006 Southern California Law Review. A Henderson spokeswoman declined to comment.

Altogether the professors analyzed 12 instances in which it appeared that hedge funds or other large shareholders voted to try to swing public-company contests in their favor without much ownership stake. In 10 others, they said investors just hid their stake in the company until a vote.

The shareholder vote is rooted firmly in corporate law, which is based on the notion that shareholders vote in the best interests of the company in which they own stock. The effects of short-selling and other sophisticated instruments that can separate a vote from economic interest were never considered. "You have this whole superstructure built on this notion that there is this coupling of economic interest and voting power," says Mr. Hu. "With these financial innovations, you're screwing around with the foundation."

Hedge funds say their actions are legitimate, lawful and many times in the best interest of their investors. Often they borrow stock or use a hedging strategy to minimize the risk of their stake without any intention to affect the votes of the companies. They also say that if institutions can make money by lending shares, there shouldn't be a judgment against those who borrow.

"You should be able to vote your shares irrationally if you want," says Mark Weingarten, a partner in New York with law firm Schulte Roth & Zable who advises hedge funds. He adds, "The rules and state law simply haven't caught up with the marketplace for ophisticated trading techniques. They never contemplated the slicing and dicing of ownership and voting power that's done in the marketplace."

It's routine for hedge funds and other investors to borrow shares to vote them. Many individual investors hold their shares in margin accounts with their brokers. Brokers lend those shares out, often when they are requested by short-sellers, who borrow shares in the expectation the price will fall, sell them and hope to profit by buying them back at a lower price.

The California Public Employees' Retirement System reported in October that it made $129.4 million in net income from lending securities for the year ending March 31, 2006. Critics say investors like Calpers shouldn't lend their shares if borrowers will use them in ways to undermine corporate governance. Proponents of securities lending say Calpers and other institutional investors have a fiduciary duty to make the most money for their constituents.

Not everyone agrees where the fiduciary duty lies. Lord, Abbett & Co., a mutual-fund company, has scaled back its stock lending program recently, saying it sometimes didn't get securities back in time to vote and decided that the money it was earning from lending out stocks wasn't worth it. "It was impeding our corporate governance efforts in a troubling number of circumstances," says Robert Morris, chief investment officer at Lord Abbett.

Calpers says it prohibits lending its 30 largest equity investments to make sure they will be available for voting, and on a second list monitors 300 of its largest so that if Calpers wants to vote the shares, it can try to get them back. A Calpers spokesman called those measures "a sufficient safeguard for our interests, for the time being."

Brokerage firms keep records of which shares are lent out when, and which holders of stocks are supposed to have the votes. But shares can be lent and re-lent and the records don't always keep up. Sometimes proxies are sent to both owners and borrowers, leading to "overvoting."

The New York Stock Exchange, which says tracking of votes has become inadequate, found overvotes in almost all the shareholder votes it tested at Deutsche Bank in 2002 and 2003: 23 of 27 instances. "There shouldn't be overvoting," John Thain, chief executive of NYSE Group Inc., said in a speech last year. "The question is, 'How do we prevent that from happening?' "

Last February, Deutsche Bank agreed to pay $1 million, without admitting or denying wrongdoing, to settle NYSE allegations that the brokerage firm didn't have proper systems in place. In June, UBS Securities, Goldman Sachs Group Inc. and Credit Suisse Securities agreed to pay a total of $1.35 million, without admitting or denying wrongdoing, to settle similar NYSE charges.

James Morphy, the head of mergers and acquisitions at New York-based law firm Sullivan & Cromwell, says because the votes haven't yet affected many outcomes in general corporate elections, companies haven't spent the time or money to dig deeply into who actually owns and votes their stocks. "To the extent there are a lot more voting contests, these issues are going to come to the fore," he said. As shareholders are getting more power in the wake of management scandals, votes are narrowing, which forces companies to pay more attention to who their shareholders are -- as have the growth and increased combativeness of hedge funds.

One way "empty voting" occurs is by borrowing stock ahead of the date that companies use to determine which stockholders can vote at a particular meeting. Record dates are usually set 30 days before a vote, designed to give companies adequate time to print and mail information to its shareholders of record.

In 2002, activist British hedge fund Laxey Partners, which owned a 1% stake in British Land, a major British property owner, sought to break up the company and oust its chairman John Ritblat. With a key proxy vote approaching, Laxey boosted its voting stake in British Land to 9% by borrowing more than 40 million shares days before the record date. By being shareholders of record on the record date, Laxey was entitled to vote at the next meeting.

In the end, Laxey's proposals were defeated. But Mr. Ritblat criticized Laxey for borrowing the shares, saying it wasn't good corporate governance. The three institutions that lent out shares -- Hermes, Barclays Global Investors and Scottish Widows, a life insurance and investment arm of Lloyds TSB -- apologized to British Land. Hermes says it didn't lend shares to Laxey but apologized to British Land for not recalling its shares and voting its full strength in support of management.

Since then, several large pension funds have taken notice and established internal systems to allow them to recall shares ahead of a vote and better monitor which shares are lent.

Because corporate voting is mostly governed by state law, the SEC's main tool in voting issues is requiring more disclosure. "Empty voting" usually doesn't trigger current disclosure rules because they don't cover borrowed stock or derivative holdings unless an investor owns more than 5%. Many hedge funds own just shy of 5%, Mr. Hu says -- and then use empty-voting strategies to enlarge or hide their stake.

Paul Atkins, a Republican SEC commissioner, expressed concern in a speech this week that empty-voting and other techniques should be considered as the SEC looks to tackle other shareholder proposals. That could delay the SEC from moving forward in resolving whether shareholders are permitted to nominate their own directors on corporate ballots.

One potential solution is to give institutional investors better notice of important proxy votes so they can know to recall shares -- and the attached voting rights -- that they've lent. Some investors already write recall options into their lending contracts, but brokerage firms have advised it could make borrowing those shares less attractive.

Professors Hu and Black recommend regulators require disclosure of an investor's complete stake, however it is held. Disclosure now "is so patchwork, you almost never see it," says Mr. Hu. "We need to get a better grip on just how extensive these practices are."

Regulators, however, don't want to disrupt the stock-lending market, and also have to be careful that any fix doesn't have the reverse effect that they intend. For instance, weighing votes by how long the stock has been held could curtail empty voting but disenfranchise individual investors, too.

I have never in my life participated in the stock market, or any other speculative investment activities. I have seldom loaned money to a person or a group, but in the few instances that I have been asked to help another financially, I have never asked for a charge of interest or even a term for the loan. I believe it is a far greater ethical good to give to those in need out of charity, rather than prospective profit. I, along with my family, have never invested in a piece of real estate on which I did not intend to live. I have never approved of the hoarding of property beyond a person's immediate needs. Nonetheless, I live in America. Being what it is -- the purest form of capitalism to be found of any country in the world -- America's markets and models of economic growth provide for the ability to establish a very casual, effortless, routine and perhaps second nature institutionalization of avarice and insatiable gluttony.

But not to be misunderstood, I have never advocated another system of economy. Capitalism is the only natural, honorable, liberty-respecting economic model that exists.

Commerce is a natural part of civilization, and no collective, centralized form of economy can exist without a broad dissent spread across the populace of a nation, or at the very least a silencing thereof, courtesy of a ruthless, authoritative government. It is unjust for a government to determine what limits on commerce must be imposed, if that government is not a reflection of the wishes of an outspoken free society. So luckily, as Americans we are afforded the privileges of collectively deciding our own system of economy, electing officials who will thereafter shape the laws that reflect our wishes, and if there are still those among us who disagree, well, at least they will be spared of censure or prosecution. Assuming all of that to be true of our country, which most American citizens would affirm, we may then obviously trust our elected officials to responsibly maintain our economy in the evenhanded fashion that we have asked them to do, right?

Not in this lifetime. Not as long as there are people who have attained a net worth of at least one million dollars, or have made $200,000 a year in income for at least the last two years. But what does that matter? According to the U.S. Securities and Exchange Commission, the aforementioned attributes can easily qualify you to become what they refer to as an "accredited investor." This means that according to your financial superiority, you are afforded the right to enter into certain high-yield, and often high-risk, investment schemes in which the average citizen would be unable to participate and in any event be unable to afford. And over the past few years, more and more people who fit that description have found their way into an increasingly important, and blindingly intimidating, investment stratagem -- the hedge fund.

Hedge funds have existed, in crude forms, for at least the past half-decade. Ever since Alfred Winslow Jones, the so-called father of the hedge fund industry, decided to combine diverse investment strategies with the short selling of stock in the late 1940s, the hedge fund has evolved into an exceedingly monstrous component of our economy. As of 2006, hedge funds have totaled approximately $1.2 trillion, all within the hands of about 9,000 investment firms. In case you are wondering what that looks like in the overall sense of the economy, the sum of assets currently managed by hedge funds is roughly equivalent to 10 percent of America's gross domestic product. So, if Russia was for sale, hedge fund investors could collectively buy it and still have a tidy $450 billion sum left over for decorations.

But is this a bad thing? Not according to our laws on commerce. I have always advocated free trade and commerce, uninhibited by tight government regulation, but rather regulated by the exercise of restraint, frugality and charity by the people. But, of course, an economy without limits leaves wide open the paths to greed. And the effects of that greed have been well noted by Americans after the collapse of the stock market in 1929 and the subsequent Great Depression that ensued, which lead us to, by some degree, collectively agree on a level of regulation by such government groups like the Securities and Exchange Commission.

But when it comes time for the rich and shameless of America to yield to the majority's wishes and fall under the same expectations of every other law-abiding citizen, the rules change somewhat. The hedge fund is most comparable to the well-known mutual fund, in which nearly anyone may invest. Mutual funds use a variety of investment methods to garner greater returns for its investors, who share a mutual profit. It can be described as a great pool of money that is not managed directly by investors, but rather handled by a fund manager. If the net value of the fund's assets under management grows, surprise, the net asset value per share rises, increasing your individual profit. Hedge funds are designed on this model, but are exclusively reserved for those with very deep pockets.

What is troubling about hedge funds is that they, by a wide margin, escape the meticulous regulation with which mutual funds and other run-of-the-mill investment options are obligated to abide. As they limit themselves to a relatively small amount of investors per fund, each required to be considerably wealthy, they fall into certain government categories that exempt them from close scrutiny. In plain terms, they are groups of millionaires who have noticed a loophole in the SEC's policy, and have decided to exploit it. The SEC has even admittedly claimed that oversight would most likely be impossible anyway, given their limitations on staff and expertise.

Even more of a reason to watch hedge funds more closely is their high-risk, high-value nature. The most famous example of what can happen when unregulated hedge funds are allowed to do business as usual would be the case of the hedge fund Long-Term Capital Management, which lost $4.6 billion in less than four months in 1998, eventually leading to its dissolution in 2000.

And if all of that isn't enough to ask the government to hold these people accountable on the same level as all other citizenry, we can of course point to the fact that their unregulated status leaves open much leeway for unethical business operations. In terms of privacy violations, they are able to indulge in as much insider trading and data exchange as they'd like, assured nobody is watching. Not to be misunderstood, a man's money is a man's money, and should be spent according to his will. But as a free and unbiased society, should not all people be held to the same level of expectation regardless of their income? In my opinion, money should not be able to afford you a higher class of citizenship in this country, not in America. But then again, I'm the sort of fellow who would never be involved with a harsh environment like Wall Street to begin with.

Nicolas Sarkozy dénonce les pratiques des hedge funds, ces fonds alternatifs qui visent la performance absolue quelle que soit l'orientation du marché. Le candidat de centre droit à la présidentielle française préconise de taxer au plan européen les «mouvements spéculatifs» des investisseurs comme les hedge funds, selon une interview aux Echos parue mercredi. «Je suis extrêmement préoccupé par les mouvements spéculatifs, a-t-il déclaré. Qui peut tolérer qu'un hedge fund achète une entreprise grâce à des emprunts, licencie 25% des salariés pour les rembourser, et la revende par appartements? Pas moi.»

Sa proposition de taxe européenne vise à «placer la zone euro à l'avant-garde de cette réflexion» et à «faire de la France un pays qui sait frapper les prédateurs» financiers.

Faut-il voir derrière ces propos une dérive gauchisante? Bien au contraire. En France comme en Allemagne, le grand patronat se méfie des fonds alternatifs. Leur culture largement anglo-saxonne reste étrangère à l'Hexagone, où ils sont jugés peu soucieux de l'intérêt industriel des entreprises.

Appels à la réglementation
En tapant sur les hedge funds, Nicolas Sarkozy se fait l'écho des critiques récentes de Claude Bébéar. Interrogé le 24 janvier dans les Echos, le président du conseil de surveillance d'AXA n'a pas mâché ses mots: «Le problème est que ces fonds n'ont que la spéculation en tête. Ils jouent sur la rumeur pour créer des déséquilibres et susciter la volatilité dont ils ont besoin pour faire un profit sans cause économique.» Un «jeu malsain», selon le CEO du numéro un français de l'assurance, qui souhaiterait qu'on leur impose plus de transparence et qu'on limite leur recours à l'endettement et aux emprunts de titres. Ses appels à plus de réglementation rejoignent les préoccupations de nombreux acteurs, exacerbées par l'implosion en septembre dernier d'Amaranth Adivsors, un fonds qui a perdu 6,6milliards de dollars sur des paris très risqués sur le gaz naturel. Les ministres des finances et les banquiers centraux du G7 se sont engagés la semaine dernière à scruter de plus près les pratiques des hedge funds.

Si la chancelière allemande Angela Merkel considère la réglementation de cette industrie qui gère quelque 1800milliards de dollars comme une priorité pour la présidence allemande du G7 et de l'UE, les appels de Nicolas Sarkozy pourraient se heurter à l'opposition de Londres et de Washington, qui privilégient une approche de marché en encourageant les investisseurs et les créanciers des hedge funds à leur imposer plus de prudence.

WASHINGTON, Feb. 22 — The Bush administration said Thursday that there was no need for greater government oversight of the rapidly growing hedge fund industry and other private investment groups to protect the nation’s financial system.

Instead, the administration, in an agreement it reached with the independent regulatory agencies, announced that investors, hedge fund companies and their lenders could adequately take care of themselves by adhering to a set of nonbinding principles.

The principles, many already being followed by the sharpest investors and best-run companies, say that investors should not take risks they cannot tolerate and should carefully evaluate the strategies and management skills of hedge funds. They also call for funds to make clear and meaningful disclosures to investors.

The decision came after months of study by a presidential working group of top officials and regulators. They looked at both the hedge fund industry, which has more than $1 trillion in assets, and the management of private equity firms, which take direct control and ownership of companies rather than relying on large numbers of outside stockholders.

The group’s conclusions reflected both the strong antiregulatory ideology of the administration and the formidable influence of Wall Street and the increasingly wealthy hedge fund industry among both Democrats and Republicans in Washington.

Three of the administration’s most senior economic policy makers — Treasury Secretary Henry M. Paulson Jr., his top deputy, Robert K. Steel, and White House chief of staff Joshua Bolten — are alumni of Goldman Sachs, which in the last decade has evolved into one of the most important players in the private equity market.

As hedge funds have grown both in the United States and globally, and as periodic collapses have shaken the markets and caused investors to lose money, pressures have increased to impose greater regulation on them. But supporters say that the hedge fund industry had grown more sophisticated in recent years, is well equipped to manage risks, and that none of the failures have harmed the nation’s financial system.

The explosive growth in recent years of private equity investment and hedge funds has made their managers symbols of new wealth, a huge source of philanthropy to the nation’s museums, hospitals and orchestras, and a major new force in political campaigns.

Millions of Americans do not qualify to make investments in hedge funds, which are pools of largely unregulated assets, but they are exposed to the risks associated with hedge funds through their pensions and personal retirement accounts.

The decision to avoid demanding more openness from private funds represents a starkly different approach to that undertaken by Washington for publicly traded companies, which in the last five years have faced a battery of new governance, auditing and disclosure rules following the scandals at Enron and other large companies.

The working group rejected any proposal that would give the government the ability to inspect the books and records of hedge funds or force the funds to make regular reports about their activities. Both banks and brokerage firms must adhere to stringent rules that give regulators great leeway in supervising them.

While the working group never considered anything as strict, many hedge funds oppose even minimal oversight because they say it could slow their ability to make lightning-fast investment decisions or reveal trading strategies to rivals.

A previous effort by the Securities and Exchange Commission to protect investors by requiring hedge funds to register with the government failed last summer. In June, a federal appeals court ruled that the agency did not have the authority to regulate them.

In leading a deeply divided commission to adopt those rules in the first place, its then chairman, William H. Donaldson, said that hedge funds had been central figures in a variety of market trading abuses and that registration was a modest and essential way for regulators to begin to understand them. Although he had the support of two of the four other commissioners for his efforts on hedge funds, Mr. Donaldson came under heavy criticism from Republican lawmakers and top administration officials for suggesting that regulators shine a light on what he called “a dark corner” of the market.

Under its new chairman, Christopher Cox, the commission decided not to appeal the court decision that struck down the rules. Instead the agency is preparing to write a new regulation that would require investors in such funds to have greater personal wealth. That proposed regulation is not affected by today’s announcement.

On Thursday, the president’s working group, led by Mr. Paulson, proposed a series of nonbinding principles that put the onus primarily on companies, investors and the buyers and sellers of their complex securities to impose a “market discipline” that should be adequate to protect investors and the marketplace. Officials said those principles would make the hedge fund companies more transparent and their investors and creditors more vigilant to shady operators and excessive risk-takers.

At a briefing Thursday, a senior Treasury Department official involved in drafting the principles suggested that any new regulations would discourage innovation and risk-taking. The official said he would only speak on condition that he not be identified because the new guidelines were the product of a group of agencies.

Officials acknowledged that many of the principles that were advanced by the administration and the regulators would seem obvious to smart investors and properly managed hedge funds.

“Private pools of capital can be an appropriate investment vehicle for more sophisticated investors,” read one of the main principles that the officials and agencies agreed upon. “Because these pools can involve complex, illiquid or opaque investments and investment strategies that are not fully disclosed, the risk associated with direct investment in these pools are most appropriately borne by investors with the sophistication to identify, analyze and bear these risks.”

The report said that the concerns of less sophisticated investors in pension and retirement vehicles could best be addressed “through sound practices on the part of the fiduciaries that manage such vehicles.”

The announcement was hailed by several trade groups for the hedge funds and other companies involved in trading complex financial instruments.

“The President’s Working Group has taken a thoughtful and judicious approach to many of the investor protection and systemic risk issues which surround hedge funds,” said Micah S. Green, co-chief executive of the Securities Industry and Financial Markets Association, which represents hundreds of Wall Street firms.

“Too often, regulators reach immediately for new laws or rules which can have the unintended consequence of stifling innovation or smothering markets,” Mr. Green said. “By instead providing principles and guidelines, the President’s Working Group has recognized the importance of flexibility and efficiency in a healthy marketplace.”

“They are regulating around the peripheries,” said Jay G. Baris, a securities lawyer with Kramer Levin Naftalis & Frankel in New York. “They are turning up the heat on disclosures, on fiduciaries to determine suitability, and on risk management. But they are going to stop short of substantive regulation of hedge funds or of unregistered hedge fund advisers.”

Representative Barney Frank, the Massachusetts Democrats who heads the House Financial Services Committee, called the announcement “a first step in addressing questions presented by the significant growth of hedge funds.”

“Steps are being taken to increase investor protection,” Mr. Frank added, “and I believe the appropriate committee in the House and the Senate should be working with the Presidential Working Group and others for the further study and monitoring of both issues.”

A similar statement was issued by Senator Christopher J. Dodd, the Connecticut Democrat who heads the Senate Banking Committee.

There is no expectation that Congress will adopt legislation on the subject any time soon.

Hedge-fund managers are known for their rough-and-tumble trading style. They're also getting feisty about fighting employment disputes.

That's what Harry Cohen found out when he sued hedge fund NorOdin Investment Management LP in a Connecticut federal court in July. The portfolio manager alleged that he was unfairly fired and denied part of his bonus for two years. (Read the complaint.)

NorOdin fired back, claiming in an answer to the lawsuit that Mr. Cohen was sacked because of "egregious misuse" of a company laptop computer. The fund said it found data on the computer regarding Mr. Cohen's former hedge-fund employer, including scanned personal documents of its employees such as passports, credit cards and work permits. (Read NorOdin's answer to the complaint.)

NorOdin argued that the presence of personal documents from a rival on one of its computers puts it at "serious risk of liability" relating to potential claims of theft. NorOdin said it also found "58 images with clear pornographic content" on the laptop.

The case was withdrawn, says a lawyer at Schulte Roth & Zabel LLP, representing NorOdin. Gary Phelan, who represented Mr. Cohen, declined to comment. The lawyer declined to make his client available for comment.

Lawyers say employment lawsuits against hedge funds are on the rise in the U.S. and overseas. "Ten years ago, there were virtually no hedge-fund employment lawsuits; five years ago, there were a few," says Jeffrey Liddle, managing partner at Liddle Robinson in New York. "Today, once a week we get a call."

The growth reflects a new reality of the hedge-fund world: These lightly regulated investment pools that once served as a haven for traders frustrated with Wall Street bureaucracy have themselves burgeoned into large, deep-pocketed institutions. Hedge-fund assets have ballooned over the past five years, soaring to $1.43 trillion from $539.1 billion, according to Hedge Fund Research Inc.

"In the old days," says Schulte Roth partner Paul Roth, a hedge-fund boss "could come in and say, 'You're gone.' Now [employees] will ask, 'What do you mean? You can't fire me!' "

Jean-Michel Hannoun, a top trader at GLG Partners LP, last year sued the giant London hedge fund, alleging that the firm broke a promise to make him a partner, according to people familiar with the action, which was filed in a London court. A spokesman for GLG Partners declined to comment. Mr. Hannoun referred a call to a spokesman who declined to comment.

In some instances, a hedge fund's offensive will start even before a case is heard in court. After Andrew Tong, a 38-year-old trader, sued SAC Capital Advisors in New York State Supreme Court alleging sex discrimination, the hedge fund quickly sought to have the case moved to an arbitration proceeding, says Parisis G. Filippatos, who is representing Mr. Tong.

Trying to seek arbitration rather than a court proceeding is an aggressive move because, unlike civil lawsuits, arbitrations are private and limit fact-finding and punitive damages, says Mr. Filippatos. SAC in open court also moved to have the complaint sealed and to keep the case from going forward until a decision was made as to whether to arbitrate it. The judge refused to delay the case from going forward but agreed to seal the complaint, Mr. Filippatos says, without elaborating on the suit. SAC has said the suit is baseless; a spokesman declined to elaborate. A hearing on the arbitration question is scheduled for Tuesday.

Hedge-fund lawsuits can involve big money. Brian Olson, one of the founding partners of $5 billion Viking Global Investors, based in Greenwich, Conn., sued the firm and two other co-founders in Delaware Chancery Court, alleging that he was terminated without warning. The suit, filed a year ago, claimed the fund owed Mr. Olson millions of dollars in compensation and deprived him of his share of profits and other payments. Bruce Birenboim, a lawyer for Viking and its principals, declined to comment. Viking told investors that Mr. Olson's claim is "without merit."

ra. Hedge-Funds sind für die Anbieter weiterhin ein sehr lukratives Geschäft. Im Jahr 2006 hat die Branche nach groben Berechnungen von UBS- Experte Alexander M. Ineichen, die er am Mittwoch in Zürich den Medien präsentierte, weltweit rund 84 Mrd. $ an Gebühren eingenommen. Damit übertreffen die Einnahmen der Hedge- Funds-Branche jene des Anlagefonds-Sektors, die Ineichen auf etwa 80 Mrd. $ taxiert - wobei Hedge-Funds jedoch nur geschätzte 1,5 Bio. $ Vermögen verwalten im Vergleich mit ebenfalls geschätzten 20 Bio. $ in Anlagefonds.

Einzelfonds kassieren Löwenanteil
Bei seiner Top-Down-Analyse geht Ineichen für das Jahr 2006 von einer Nettorendite bei Dach- Hedge-Funds von 10% (Bruttorendite 11,6%) und bei einzelnen Hedge-Funds von 11,6% (Bruttorendite 16,4%) aus, wobei er durchschnittlich 1% bzw. 1,5% Management-Gebühren sowie 5% bzw. 20% Performance-Gebühren unterstellt. Daraus ergeben sich Einnahmen für Funds-of- Hedge-Funds in Höhe von 12 Mrd. $ und für Single-Hedge-Funds in Höhe von 72 Mrd. $. Für die Anlagefonds-Branche kommt er hingegen für eine - aus seiner Sicht konservativ geschätzte - Bruttomarge von 40 Basispunkten (Mischung aus passiven und aktiven Fonds, Aktien- und Anleihen-Fonds sowie Vehikeln für institutionelle und private Investoren) auf Gebühreneinnahmen von 80 Mrd. $. Legt man dagegen eine Bruttomarge von 35, 45 und 50 Basispunkten zugrunde, ergeben sich Einnahmen in Höhe von 70 Mrd., 90 Mrd. oder 100 Mrd. $. Zwar ist ein derartiger Vergleich aufgrund der groben Systematik und der mangelnden Genauigkeit heikel, doch es ist schon interessant, dass der kleine Hedge-Funds-Sektor im Vergleich mit der etwa 13-mal grösseren Anlagefonds-Branche mehr Einnahmen erzielt.

Bessere Rendite mit «geringerem» Risiko
Allerdings bekommen die Investoren nach Auffassung von Ineichen, der wohl einer der angesehensten Experten für Hedge-Funds in der Schweiz ist, auch mehr für ihr Geld. Während aus Anfang des Jahres 2000 investierten 10 Mio. $ in der Hedge-Funds-Welt gut 15 Mio. $ geworden wären, hätten sich in der Anlagefonds-Branche lediglich rund 11 Mio. $ ergeben - gemessen an der Nettorendite eines Indexes für Dach-Hedge- Funds sowie der Performance des amerikanischen S&P-500-Indexes (Total Return ohne Berücksichtigung von Gebühren).

Zudem verwies der UBS-Experte darauf, dass Multi-Strategie-Hedge-Funds, gemessen an monatlichen Renditen seit dem Jahr 1990, im Vergleich mit Unternehmen des S&P-500- und des noch breiteren Russell-3000-Indexes eine massiv kleinere Verlustwahrscheinlichkeit hatten.

A Texan energy trader who emerged from Enron's ashes, John Arnold, has been crowned as the new king of the hedge fund world with personal earnings of close to £1bn last year after a spectacularly successful bet on the direction of natural gas prices. Mr Arnold, the 33-year-old founder of Houston-based Centaurus Energy, correctly predicted that the cost of gas would fall last summer. His bet netted billions of dollars in profits for Centaurus. It was precisely the opposite call to that of rival Amaranth, which lost $6bn (£3bn) predicting that prices would rise and became the biggest hedge fund failure in history.

A list compiled by Trader Monthly magazine puts Mr Arnold as top earner in the financial sector alongside James Simons, head of New York's Renaissance Technologies. Of the 100 people on the list, 93 are hedge fund managers - underlining the power of the opaque, low-profile sector - and 27 of them are based in London. They earned an average of £120m, compared with an equivalent average of £55m in 2002, and five of them took home more than £500m.

Rich Blake, senior editor of Trader Monthly, said: "The mounds of money have grown that much more mountainous."

Few are prepared to talk about their success publicly. Mr Blake said: "The stated reason, in some cases, is fear for their lives and their families' lives. But beyond that, people just feel that if you're under the radar, you can succeed more as a trader."

Although the top two on the list are in the same estimated income bracket, Mr Blake said he believed the founder of Centaurus had the edge. Mr Arnold's success is all the more remarkable given that he began his career as an energy trader at America's most notorious corporate disaster scene, Enron. Following Enron's implosion, Mr Arnold established Centaurus with three employees in 2002 and the fund now has 40 people, including, reportedly, a full-time meteorologist.

Art Gelber, a Houston energy consultant, said Mr Arnold was "very much the gentleman," adding: "I think he knows the market pretty well. He's got skills in his background and he's got the kind of positioning and edge to succeed - although I don't know whether last year was repeatable."

Recently married, Mr Arnold owns a home in Houston's plush River Oaks area and is said to have a keen interest in art. A spokeswoman for Centaurus declined to comment although she did provide a recent newspaper article highlighting Mr Arnold's support for a children's charity called the Knowledge is Power Program.

Of the world's top 10 earners, all are in the US. Among them is the legendary oil speculator T Boone Pickens, who is a prominent donor to the Republican party, and Eddie Lampert, who controls the Sears and Kmart retail empires.

In fifth place, Stevie Cohen has faced scrutiny over a lawsuit alleging that his SAC fund disseminated faulty research to drive down the stock of a biotech company. He lives on a 6-hectare (14-acre) Connecticut estate with an ice-hockey rink and paintings by Monet and Pollock.

Many of the funds run by the top earners are far out of the reach of ordinary investors. John Mauldin, a Texas-based hedge fund consultant, said many had a minimum investment of $10m: "Your average millionaire doesn't even stand a chance - you need money the size of a pension fund.

These are very sophisticated investors. It's not your average mom or pop putting money into these funds."

In Britain, the top "hedgies" for the second successive year were Noam Gottesman and Pierre Lagrange, joint founders of GLG Partners, who took home between £200m and £250m each. Mr Gottesman charters a customised Boeing 737 for business trips to the US and is a member of the Royal Opera House's exclusive First Night Club. Their fund, which manages £9bn, suffered a jolt last year when its star trader, Philippe Jabre, was fined for market abuse over a Japanese bond deal. Mr Jabre has since left the company.

Other leading London-based traders include Chris Hohn, who led opposition to Deutsche Börse's attempt to buy the London Stock Exchange, and Michael Farmer - a metals specialist and devout Catholic who once toyed with the idea of becoming a priest.

Jonathan Lourie, who earned £100m, heads Cheyne Capital, which recently revealed that one of its offshoots is invested in 24,900 sub-prime US mortgages.

The amount of money earned by hedge funds is relatively easy to calculate as they use formulas such as "3-and-30" or "2-and-20" - taking 2% of assets invested and 20% of profits earned. Investors are unlikely to begrudge the millions scooped by the elite managers. Mr Mauldin said: "Hedge funds are businesses with a pre-agreed structure there for all to see. If they generate no profit, they get no money. There's nobody holding a gun to investors' heads and telling them they've got to put their money into these funds."

UBS’s attempts to launch a hedge fund business using its proprietary traders ended in failure on Thursday when the Swiss bank announced it would fold Dillon Read Capital Management back into its investment banking arm less than two years after it was set up.

The decision, triggered by a SFr150m ($123m) first-quarter loss on US subprime mortgage investments, marks an embarrassing end to a bold attempt by UBS to allow a team of fixed-income proprietary traders to manage clients’ money. It is also a setback for John Costas, the US-based former chief executive of UBS’s investment banking arm, who stepped down in June 2005 to head DRCM.

The UBS move will result in a $300m restructuring charge, of which $200m will be distributed to the 250 DRCM employees via stock for deferred compensation and retention payments.

UBS executives said the bank had underestimated the complexity of lifting the proprietary trading operation out of the investment bank and establishing it as a separate asset management business.

Peter Wuffli, UBS chief executive, said it had also “under- appreciated the synergies of a proprietary trading operation being directly integrated into the investment bank”.

But Mr Costas said returns from the $3.5bn proprietary fund had been at or above plan for 18 months until the subprime problems in the first quarter.

DRCM also struggled to raise money from external investors, attracting only $1.2bn for its first fund, which closed at the end of last year. This will be returned to investors.

The world’s largest investment banks in recent years have grappled with the challenge of building their hedge fund operations.

Last month, Citigroup spent more than $600m to lure Vikram Pandit, the former Morgan Stanley executive, to run its alternative asset division by agreeing to buy his hedge fund, Old Lane. Morgan Stanley has also spent hundreds of millions of dollars buying stakes in hedge funds on both sides of the Atlantic.

Mr Wuffli said the decision was difficult. “It is natural with entrepreneurial activities that not everything you do succeeds.”

DRCM’s subprime loss marks the latest case of a leading financial institution miscalculating in the market for risky US mortgages. Other groups suffering setbacks include HSBC, General Electric and GMAC. UBS said clients had not lost money because their funds had been committed to recent investments.

Mr Costas will oversee the reintegration of DRCM, and will be a part-time senior adviser to UBS’s executive board. He said he would focus on identifying growth opportunities. “I have had an entrepreneurial zeal throughout my career. Too much so, some people would say.”

David Williams, an analyst at Morgan Stanley, questioned whether UBS would be able to retain the DRCM traders. “After all, until now they were part of an elite hedge fund unit,” he wrote. “We think there is a considerable staff departure risk.”

Two years ago, when the world was as besotted about hedge funds as it is about private equity today, UBS created Dillon Read Capital Management. Analysts’ and investors’ eyebrows rose. It looked like the Swiss bank was creating a plaything for John Costas, its global head of investment banking who may, or may not, have been about to walk. There were also concerns about the business structure. DRCM managed the fixed income funds that used to be run in-house alongside third-party assets. Having a unit at arms length from Zurich created potential conflicts.

On Thursday, UBS announced that DRCM would be closed down following a $123m trading loss in the first quarter of 2007, apparently related to difficulties in subprime in the US. For UBS to pull the plug so quickly as well as incurring a $300m restructuring charge indicates that there must have been insurmountable problems and that initial fears were well founded. Many will groan at the price of this misadventure – probably in excess of $500m – and the hit to credibility. But the management should be applauded for admitting its mistake so quickly and the one-off cost is worth less than 1 per cent of UBS’s market capitalisation.

Washington, D.C., May 7, 2007 - The Securities and Exchange Commission today announced a settled administrative proceeding against Zurich Capital Markets Inc. (ZCM) for its role in providing financing to hedge fund clients that engaged in market timing of mutual funds and facilitating the hedge funds' deceptive trading tactics. The Commission ordered ZCM, a New York-based subsidiary of Zurich Financial Services, to pay $16.8 million consisting of $12.8 million in disgorgement and prejudgment interest and a $4 million penalty. The money will be distributed to the mutual funds that were harmed as a result of market timing ZCM facilitated.

Mark K. Schonfeld, Director of the New York Regional Office, said, "By knowingly financing their hedge funds clients' deceptive market timing, ZCM reaped substantial fees at the expense of long-term mutual fund shareholders. Because of ZCM's attractive financing arrangement and its willingness to create a number of anonymous special purpose vehicles (SPVs) for its hedge fund clients, the hedge funds were able to inflate their trading profits from their deceptive conduct."

Helene Glotzer, Associate Director of the New York Regional Office, added, "This action demonstrates that the Commission continues to carefully examine the role of financial intermediaries that assist hedge funds engaged in deceptive practices."

The Commission's Order finds that ZCM aided and abetted four hedge funds that were carrying out schemes to defraud mutual funds that prohibited market timing. ZCM's hedge fund clients knew that many of these mutual funds prohibited market timing. In an effort to avoid being detected and potentially blocked from making market-timing trades in these funds, each of these hedge funds and ZCM disguised their identities. For example, ZCM created seemingly unaffiliated SPVs in whose name multiple brokerage accounts were opened, thus enabling ZCM's hedge fund clients to disguise their identities and market time mutual funds.

The Order finds that ZCM profited from the fees it received from the business of providing derivative financing to hedge funds engaging in a mutual fund market-timing strategy. As a result, the Commission's Order finds that ZCM willfully aided and abetted and caused violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

ZCM, which is currently winding down its operations, consented to the entry of the Commission's Order without admitting or denying the Commission's findings. In determining to accept the settlement, the Commission considered ZCM's cooperation in this investigation.

Ht. Brüssel, 8. Mai Die EU-Finanzminister haben an ihrem Ratstreffen (Ecofin) vom Dienstag ein Positionspapier zu Hedge-Funds verabschiedet, das Kreditgeber, Anleger und Behörden zur Wachsamkeit und zur richtigen Einschätzung der potenziellen Risiken solcher Fonds aufruft. Hedge-Funds sorgen mit ihren spekulativen, zuweilen aggressiven Strategien immer wieder für Schlagzeilen in nicht selten negativer Tonlage. Das Papier würdigt nun aber, dass sie «in erheblichem Masse» zur Förderung der Effizienz des Finanzsystems beigetragen hätten. Zugleich unterstreicht es die mit ihrer Aktivität verbundenen potenziellen systemischen und operativen Risiken. Unter Systemrisiken versteht man das Übergreifen einer Krise auf andere Teile des Finanzsystems.

Transparenz als Schlüsselwort
Bisher, heisst es im Dokument weiter, sei die Widerstandskraft gegen solche systemische Schocks durch die sogenannte «indirekte Aufsicht» im Wege einer genauen Beobachtung der Beteiligung von Kreditinstituten an Hedge-Funds und einer Verbesserung ihrer internen Risikomanagement-Systeme gestärkt worden. In Ausübung dieser indirekten Aufsicht sollen die (nationalen) Aufsichtsbehörden auch künftig die Entwicklungen verfolgen und untereinander zusammenarbeiten. Zudem fordern die Minister die Kreditgeber und Anleger auf, zu prüfen, ob das derzeitige Mass an Transparenz bei der Aktivität von Hedge-Funds angemessen sei.

Steinbrück hofft auf Verhaltenskodex
Nicht erwähnt ist im Papier die Idee eines freiwilligen Verhaltenskodexes der Hedge-Funds-Branche, die der deutsche Finanzminister und derzeitige Ecofin-Vorsitzende Steinbrück unter anderem bei einer Hedge-Funds-Debatte am informellen Ecofin vom April verfochten hatte (vgl. NZZ vom 23. 4. 07). Dass dies nun nicht explizit in das Papier einfloss, sah Steinbrück nicht als Rückschlag. Vielmehr verwies er vor den Medien auf weitere Beratungen auf europäischer Ebene sowie im Rahmen der derzeit ebenfalls von Deutschland präsidierten G-7 und G-8. Wenn es bis Ende Jahr gelänge, im Dialog mit der Branche zu einer solchen Selbstverpflichtung zu kommen, wäre dies ein bemerkenswerter Erfolg, sagte er. Er habe bisher (in der EU) keinen Widerspruch gehört gegen einen freiwilligen, von der Branche selbst implementierten und überwachten Verhaltenskodex. Auch EU-Binnenmarktkommissar McCreevy erklärte, er würde einen solchen Kodex unterstützen. Zugleich machte er klar, dass er derzeit keine Rolle der EU-Kommission bei der Erarbeitung eines solchen sehe.

Von Forderungen nach einer strengeren, über bestehende Vorgaben hinausgehenden Regulierung der Branche sah der Ecofin ab. Alle seien sich einig, sagte Steinbrück, dass ein gesetzlich- regulatorischer Rahmen der falsche wäre. Innerhalb der EU haben sich vor allem die Briten stets gegen zu weit reichende Eingriffe in die Branche gestellt. Sie sind besonders betroffen, da viele Hedge-Funds aus London verwaltet werden.

Over the weekend of June 17, executives at Bear Stearns scrambled to avert the collapse of two hedge funds.

Officers at other Wall Street banks that had provided billions of dollars in loans to the funds began to question why Bear Stearns was not stepping in to bail them out.

In the midst of the turmoil, Richard Marin, the head of the Bear unit that ran the troubled funds, “stole away” from the “crisis-hedge-fund-salvation-workaholic weekend” to see the new Kevin Costner thriller “Mr. Brooks.”

Take a “pass,” Mr. Marin wrote in a review he posted that day on his blog, whimofiron.blogspot.com.

“I had been working 24-7 on this thing. Taking a small amount of time to clear my head seemed reasonable,” Mr. Marin said yesterday. The blog was personal, he said, intended for his friends and family. It let him talk about movies, life on Wall Street and his efforts to lose weight.

Still, the episode — and Mr. Marin’s blog — offer some insight into Bear’s response to the near collapse of the funds. An embarrassing hit to the bank’s reputation, the incident has forced Bear to pledge up to $1.6 billion in secured loans to bail out one of the hedge funds. It is not providing any financing for the second, much more heavily leveraged fund, which was started in August and has suffered much bigger losses.

But Bear Stearns’s troubles are far from over. The Securities and Exchange Commission has started an informal inquiry into issues surrounding the Bear hedge funds and how the industry is valuing mortgage-related securities like those that Bear holds.

In addition, Bear Stearns has temporarily shifted its top mortgage trader, Thomas Marano, over to the unit, Bear Stearns Asset Management, to help with the funds, say people who were briefed but were not authorized to speak for attribution. They added, however, that assets in the two funds have already been reduced by 90 percent through sales and agreements with creditors.

Standing in the middle of this firestorm is Mr. Marin, a Wall Street veteran who spent 25 years at Bankers Trust, where he helped develop and build its derivative business.

When Mr. Marin joined Bear Stearns Asset Management four years ago, the unit was considered a sleepy backwater inside the bank, largely overlooked for faster growing, more profitable businesses.

“When I joined Bear, Bear had not run the business as aggressively as they wanted to. The way they put it to me was, ‘Bear wants to succeed in whatever it does and that includes asset management,’ ” Mr. Marin said yesterday.

He set a course to bolster the unit’s profit and its stature by shedding unprofitable businesses — like its retail mutual fund distribution arm — and focusing on adding products with richer fees, like hedge funds and structured credit securities for institutional and wealthy clients.

It is the same strategy undertaken by many Wall Street firms. But the crisis involving the two hedge funds, which nearly set off a broader sell-off in the market for mortgage-related securities, helps illustrate the potential risks Wall Street firms are increasingly willing to take to improve profit in their asset management arms.

“If you want to stay alive in the asset management business,” said Richard Bove, an analyst with Punk, Ziegel & Company, “you have to go into unique products and go out on the risk spectrum. You have to do the things that Bear Stearns did. Until as of late, the strategy was working out beautifully for them.”

Since Mr. Marin took over the Bear unit, assets under management have nearly doubled to $60 billion and revenue has risen 138 percent, to $332 million at the end of last year.

Taking risk was comfortable and familiar to Mr. Marin. The son of a career United Nations diplomat, Mr. Marin grew up all over the world before attending undergraduate and business school at Cornell in Ithaca, N.Y., in the early 1970s.

He joined Bankers Trust after business school. For the next 25 years, he helped create and establish the bank’s presence in several cutting-edge fields, including futures and options trading, emerging markets debt and derivatives.

Soon after joining the Bear unit in 2003, Mr. Marin devised a strategy that was known internally as “10 in 10.” He wanted the division’s profit to represent roughly 10 percent of Bear Stearns’s revenue and profit by 2010.

He was starting at a low base; the unit’s share of revenue in 2003 was about 1 percent. Its share of the company’s overall profit was even less.

To reach that goal, Mr. Marin needed to develop products that had richer fees and higher profit margins, and he turned much of his effort toward hedge funds, said two former employees who did not want to speak for attribution because they are still involved in the industry.

Mr. Marin tapped the brokerage side of the business for talent, bringing over traders from Bear Stearns’s proprietary desks and giving them seed money to start hedge funds.

One of those tapped in 2003 was Ralph R. Cioffi. Mr. Cioffi, a longtime bond salesman who had been trading Bear Stearns’s own money for about six months, was brought over to start a hedge fund, the High-Grade Structured Credit Fund. It would invest in bonds and securities backed by subprime mortgages. While some of the mortgage-related securities were easily valued and traded, others, like collateralized debt obligations, or C.D.O.’s, do not trade frequently and can be very difficult to value.

“His concept had been looked at carefully for six months using the firm’s own money, and it was decided he would be appropriate to bring over to B.S.A.M. and start taking and running client money,” Mr. Marin said. “He had come up with an approach to trading those assets that people who are experts in that arena thought was a sound and interesting approach.”

The approach was so successful that the company started a sister fund last summer, the High-Grade Structured Credit Enhanced Leverage Fund, that would use even more leverage.

The timing of that fund, however, could not have been worse; the cooling housing market began to reveal the lax lending standards used by subprime lenders. Last fall, delinquencies and defaults began rising, making the environment for trading and valuing the esoteric securities that are related to those loans much more difficult.

Mr. Marin declined to answer questions about the second fund, which is still a subject of negotiations between Bear Stearns and creditors.

However, his blog, where access was restricted after he was questioned about it, reveals that the last few weeks have indeed been challenging. On June 23, he posted an entry saying he had spent two weeks “trying to defend Sparta against the Persian hordes of Wall Street.”

“Nothing like a good dog fight 24X7 for a few weeks to remind you why you chose the life you chose,” he wrote. “The good news is that after two embattled weeks both I and my loyal staff are still standing to fight another day.”

While Mr. Marin said the blog was personal, it did post pictures of him at Bear Stearns events and it included his corporate e-mail address. “It’s the only e-mail address I check regularly,” he said. “I don’t get many e-mails from it.”

A spokesman for the company said, “We have no comment on his personal blog.”

Last Sunday, after “another long weekend day at the office saving the world,” Mr. Marin took in “Evan Almighty,” according to his blog.