Hedge Fund ‘Side’ Show To Begin In U.K.

The U.K. is cracking down just a little more on hedge funds.

The U.K. is cracking down just a little more on hedge funds. Starting in November, hedge funds across the pond will be required to disclose “side letters” to the Financial Services Authority. Andrew Shrimpton, who heads the FSA’s hedge fund manager supervision, said at an agency conference that the FSA has been working the Alternative Investment Management Association to develop a document that would provide hedge funds with guidance on what must be disclosed, which may be ready as early as next week. After announcing in March its concern about the side letters, the FSA has settled on requiring only “material” information, such as terms of an agreement giving investors or a group of investors special redemption rights. “That scenario has a lot more of a ring of truth this week with the situation at a certain fund,” he said, obviously referring the Amaranth Advisors. Not included, for example, would be the fees investors pay. “We don’t think it’s necessary to give the full details,” said Shrimpton. “These are sophisticated and informed investors and once they know they’re there, it’s up to them to ask further questions and conduct due diligence on managers.”