Amid fresh attacks on hedge fund and calls for closer scrutiny and tighter supervision, two former U.S. Treasury secretaries are planning to enter the industry. Moving from President Bush to hedges is John Snow, who recently relinquished his position and has been named chairman of Cerberus Capital Management and its $16.5 billion in assets under management in hedge funds and private equity. (Former U.S. VP Dan Quayle happens to be chairman of Cerberus unit Cerberus Global Investments.) One of Snow’s predecessors is also heading for the hedge funds: Lawrence Summer, who served under President Clinton and recently stepped down as president of Harvard University, has joined as a part-time managing director of the $25 billion-plus D.E. Shaw, while retaining his faculty position at the Ivy League school. Both Snow and Summers are economists, and some observers expect them to use their D.C. connections for some heavy-duty lobbying. In a statement, Shaw said Summers would work on “strategic initiatives” and “high-level portfolio management activities.” Snow’s duties have not been disclosed, but Cerberus CEO Stephen Feinberg said in a statement that he expects the firm “will benefit enormously from his vast experience in business operations as well as his keen insights to economic trends and forces.” Both Snow and Summers follow another former Treasury secretary into hedge funds: Paul O’Neill, who preceded Snow and an adviser to The Blackstone Group, which also manages hedge funds. The newcomers arrive just as Treasury has been tapped to lead a task force created to study the impact of hedge funds on financial markets. The New York Times notes that Snow and Summers in their cabinet posts opposed strict hedge fund regulation.
