Hedge funds accuse APRA of ‘headline grabbing’

APRA gearing hedge fund hedge funds superannuation funds fund manager

25 March 2003
| By Freya Purnell |

HEDGE fund managers have hit back at theAustralian Prudential Regulation Authority(APRA) over concerns voiced by the regulator last week about superannuation funds investing in hedge funds.

The managing director ofHedge Funds of Australia(HFA), Spencer Young, says he welcomes APRA’s interest in hedge funds, but labelled the statement released last week “wildly generalistic” and “headline grabbing”.

“Every point about hedge funds that APRA said should be checked out by trustees is what they should be checking out in any investment,” Young says.

While Young agrees with APRA’s view on single strategy hedge funds that all but the most sophisticated investor should stay away from these funds, he believes that APRA should take a “more reasonable” approach to diversified fund-of-hedge-funds.

Dana Hall, the managing director of US-based hedge fund manager Lighthouse Partners, says APRA’s comments are similar to statements by the Securities and Exchange Commission (SEC) in America.

“I can see they want to protect the mum and dad investors, but they don’t make any distinction between the one-man band who runs a hedge fund out of his garage and serious investment managers who have a diversified portfolio and many years experience,” Hall says.

APRA’s concerns about hedge funds were that they rely heavily on a single strategy, with broad delegations for the use of gearing and derivatives, and on a single individual to execute the investment management process.

HFA recently received the only AA rating invan Eyk Research’s first review of the fund-of-hedge-fund sector.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

3 weeks 5 days ago

This verdict highlights something deeply wrong and rotten at the heart of the FSCP. We are witnessing a heavy-handed, op...

1 month ago

Interesting. Would be good to know the details of the StrategyOne deal....

1 month ago

Insignia Financial has confirmed it is considering a preliminary non-binding proposal received from a US private equity giant to acquire the firm. ...

1 week 3 days ago

Six of the seven listed financial advice licensees have reported positive share price growth in 2024, with AMP and Insignia successfully reversing earlier losses. ...

6 days ago

Specialist wealth platform provider Mason Stevens has become the latest target of an acquisition as it enters a binding agreement with a leading Sydney-based private equi...

5 days 4 hours ago