The Alternative Investment Management Association (Aima) has criticised a European Commission white ...
The Alternative Investment Management Association (Aima) has criticised a European Commission white paper for its description of hedge funds as risky.
The white paper on Enhancing the Single Market Framework for Investment Funds described hedge funds as products that carry "a relatively high probability of risk of very adverse investment outcomes".
Aima said quite the opposite was true for hedge funds. Hedge funds are essentially designed to recognise risk factors in times of market volatility and minimise these where possible. The organisation commented when most investment funds slumped in value a few years ago, hedge funds continued to perform, protecting their investor's capital.
However, Aima was happy the EC recognised the importance of the European investment management industry and that the existing pan-European investment industry needed to be modernised.
Florence Lombard, executive director at Aima, said: "The white paper is very clear that professional investors should be allowed to operate without undue hindrance and that the EC will work to sweep away any such red tape which impedes professional investment business.
"We are happy to see standardisation of definitions for private placements but less so on the prospect of any new regulations. This is an on-going exercise and the commission has promised further research on non-harmonised funds, including hedge funds and the need to develop a single private placement framework."
These changes will be a means of retaining and growing business in Europe and the moves may well benefit investors in some nation states that currently suffer from outdated regulatory practices.
Aima criticises EC white paper on describing hedge funds as risky
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