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Pension Funds Propel Hedge Funds, VC

Pension funds are propelling venture capital fundraising to new heights and also responsible for pumping up London as Europe’s main hedge fund hub.

Pension funds are propelling venture capital fundraising to new heights and also responsible for pumping up London as Europe’s main hedge fund hub. According to a report by the European Equity & Venture Capital Association, "Independent fundraising reached €263 million in 2005. Pension funds seemed to be the main source of this increase providing 43% of the total amount (some €114 million). Contrast that to just four years earlier when pension funds represented a mere 8% of the independent fundraising, with banks contributing nearly one-third of the total. Meanwhile, according to HedgeWeek, hedge funds can take credit for boosting London as a hedge fund center as total European assets soared 44% in the year ended June 2006. "The asset growth came partly from the impact of fund performance," says HedgeWeek, "but mostly as a result of fresh capital inflows, especially from private sector and local authority pension funds." As a result of the new cash, 80% of all European hedge fund assets are run from London, up 4 percentage points from last year. By the way, Charlie McCreevy, the European Commission’s Internal Markets commissioner and an increasingly vocal supporter of hedge funds, said in speech to the Institute for European Affairs in Ireland that "it is a myth that European hedge funds are not regulated," noting that industry is "subject to wide-ranging national regulatory requirements" and denying that the EC was "turning a blind eye" to hedge funds’ goings-on.

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