ITALY - Italian economy minister Giulio Tremonti has called for a ban on hedge funds, defining such funds as "insane".
media and public opinion screening. He concluded they were opaque instruments, which constituted a normative problem.
His comments came despite plans by the Italian treasury department [part of Tremonti's ministry] to launch a public consultation on a draft regulatory document by the end of the year to review current rules which prohibit pension funds from investing in hedge funds (www.globalpensions.com; 23/09/08).
In a joint statement, Florence Lombard, CEO, Alternative Investments Management Association (AIMA) and Richard Baker, president and CEO, Managed Funds Association (MFA), said the hedge fund industry in Italy was a model of successful regulation, provided excellent risk-adjusted returns for investors and was an important source for job creation.
They added: "It would be a serious mistake to consider eliminating these innovative private pools of capital that are, in fact, an essential source of capital to investors, to Italy and to the global economy."
Lombard and Baker also said hedge funds provided critical risk management tools to pension funds and helped them to meet their future funding obligations to retirees.
In particular, they said this was not the time to think about abolishing an industry that was an essential source of liquidity.
They said: "It is too easy to point a finger at an industry that is misunderstood; hedge funds are not an appropriate scapegoat during a crisis that was caused by failures in the regulated banking system."
The Competition and Markets Authority (CMA) has published three working papers as part of its investigation into the investment consultancy and fiduciary management markets.
In this week's Pensions Buzz, we wanted to know whether contract-based, trust-based or a master trust arrangement would be best for a new defined contribution (DC) scheme.
This week's edition of Professional Pensions is out now
MPs failed to place legislation into the Financial Guidance and Claims bill that would have made pension guidance default, which Just Group director Stephen Lowe said left a "bitter taste".