Hedge funds for the masses?

Richard Stones is a consultant at Lovells. He may be contacted on tel: +44 20 7296 2000; email: richard.stones@lovells.com

German politicians may still see hedge funds as “locusts”, and there is continuing political pressure at EU level to force them to provide greater transparency about their dealings in the capital markets. But the other side of the coin is that hedge (or “alternative investment”) funds have been providing high returns, as well as diversification away from traditional asset classes and risks. Regulators across Europe have been faced with the inevitable question: is it right to prevent retail investors from benefiting from these returns? Richard Stones of Lovells examines their response.