The hedge fund trade body AIMA has lured a high-level executive from the industry to take up the newly created role of deputy chief executive, in a move to head off a threatened regulatory and tax clampdown of the $1.6trillion sector.
The appointment of Andrew Baker, chief operating officer of Schroder Investment Management, comes at a crucial time for the industry. Calls from politicians and regulators in the US and Europe for greater transparency and regulation of hedge funds are growing louder in the wake of several recent high-profile collapses linked to the meltdown of the US sub-prime mortgage market. The collapse of a pair of funds managed by Bear Stearns, and massive losses at Sowood Capital Management, has heightened worries that the high-risk strategies pursued by some firms could imperil the stability of global financial markets.
The size of the hedge fund industry has more than tripled over the last six years – more than 8,000 funds control in excess of $1.6trn, which is used to invest in equities, commodities, real estate, bonds and other assets.
