Hedge Fund Nation

SEC Commissioner Roel Campos entertained a rapt audience in Remarks Before the Hedge Fund Institutional Forum Corporate Funds Roundtable earlier this week.

He was long on facts:

I think it goes without saying that we currently are in a golden age for alternative investments. Hedge funds are an increasingly dominant force in all parts of the market. I’ve read that 18-22% of all trading on the NYSE is done by hedge funds and, as we all know, 1/3 of the London Stock Exchange is currently owned by hedge funds.

and seems to have a sense of humor:

But perhaps one of the greatest testaments to your newfound “cultural icon” status is that you recently joined the ranks of famous professional athletes and movie stars when you received your very own…shoe. Kenneth Cole last year debuted the sleek “Hedge Fund” loafer for $120 retail. In what I hope is not an ominous sign for hedge fund performance in 2007, however, I’ve recently seen this very same shoe now being sold on Bluefly.com for $96.00 — a 20% loss!

Roel also appears to be tolerant of hedge fund IPO’s-although we doubt he has a position in Fortress Investment Group (FIG-NYSE):

Although I have been tracking with interest the several fund managers that went public on foreign exchanges last year, I watched with particular satisfaction the US market’s reaction to its first hedge fund IPO — the Fortress IPO — on February 9, 2007. In particular, the fact that Fortress chose to list on the NYSE — notably, with an incredible 68% rise on the first day of trading alone — seemed to validate my long-held belief that, notwithstanding all the nay-sayers who have criticized the US markets as being less attractive to issuers than other foreign markets, there remains a significant and dramatic premium for listing and raising capital on our domestic shores.

What is particularly astonishing about this particular IPO was that it showed that even those entities that have historically prized privacy and minimal regulation above all else are now modifying their calculus. Fortress voluntarily chose to register its shares with the SEC and to list on the NYSE — and, in doing so, to comply with all of the attendant regulatory responsibilities — in order to better raise capital. Fortress did the cost-benefit analysis of costs of regulation vs. enhanced capital, and clearly the capital side won.

Read Entire Speech here
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Commissioner Roel C. Campos was first sworn in as a Commissioner of the United States Securities and Exchange Commission on August 22, 2002. On June 2, 2005, he was nominated by President George W. Bush for a second term, and was confirmed by the Senate on July 29, 2005.
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The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No position in securities mentioned above.

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