The tough-talking Financial Services Authority may have a soft side after all. Following its recent announcement that it was going to clamp down on hedge funds – saying it had "no great desire to provide and sell hedge funds to private investors" – the U.K. regulator appears to be getting ready to do just that. The Telegraph reports that when the FSA announces its HF recommendations in a week or so, it will give its blessings to the sale of hedge funds to small investors – though only through less-risky funds of hedge funds. Hedge funds in U.K. reportedly are jumping for joy at the prospect, though some are still hesitant. As Justin Urquhart Stewart of Seven Investment Management told the Telegraph, "You may be investing in a regulated product, but it in turn is investing in funds which are not regulated." By the way, over the weekend, International Financial Services reported that London-managed hedge funds rose 18% to $225 billion last year. More striking is that HF capital coming from the U.S. dropped from 86% to 62% in three years, while Euro money in HFs jumped from 9% to 26% in the same period.