The HFA Lobbies Forward

Terry Flanagan

Hedge Fund Association expands westward, in an attempt to fight for bigger, better representation of the industry.

Hedge funds have had a rough third quarter in 2011. The industry’s poor performance in Q3 brought the entire year-to-date broad based composite index, the HFRI Fund Weighted Composite Index, to a decline of -5.4%, perhaps sending fear to investors.

The Hedge Fund Association (HFA), an industry lobby group consisting practitioners, managers, and investors, is to unite community members to advocate for the global hedge fund industry in front of investors and policy makers. The group has recently expanded to include a West Coast chapter, as to foster new opportunities.

“In reality, overall, the median performance of hedge funds in the third quarter, although in negative territory, was significantly ahead of all major equity indices,” said David Friedland, president of Magnum Funds, a fund of hedge funds.

“The more transparent we can make the industry; the more we can make hedge funds available to mainstream investors, then the better off the investment industry would be. It is for these reasons why hedge funds should have a strong lobbying presence, and educate the public and the government as to the many attributes and benefits of hedge funds,” Friedland noted.

“Hedge funds are here to stay,” said Jaye Scholl, regional director of the newly created chapter for the HFA West Coast chapter. “Our purpose is to represent hedge funds, and bring the community closer to together. The HFA board of directors will bring concerns of the hedge fund industry and engage in dialogue across the country.”

While unlike the high concentrations of hedge funds in the Northeast, a geographic emergence of hedge fund start-ups in California, as well as an established community is also behind the launch of a separate chapter, according to Scholl.

“There is an established concentration of hedge funds in San Francisco, less in Los Angeles, but there are some significant players,” Scholl told Markets Media—noting Canyon Partners, and Oak Tree Capital Management.

“We have noticed an increase in the number of start-ups on the west coast, relative to a few years ago on the west coast,” said Ryan Mitchell, senior vice president of Triton Capital Advisors, and regional direction of the HFA California division.

This is partly attributable to the Dodd-Frank Act, commonly known as the Volcker rule, which limits proprietary trading by U.S. banking entities, Mitchell said.

Related articles

  1. Funds not invested in digital assets cited regulatory uncertainty as their  biggest hurdle.

  2. FX clearing offers operational efficiencies and credit intermediation.

  3. Bond Traders Face Liquidity Crunch

    FINBOURNE Technology highlights that the EU and SEC have set their sights on hedge funds.

  4. Fixed Income Liquidity to Become More Centralized

    Firms engaging in important liquidity-providing roles, including in U.S. Treasuries, will need to register.

  5. By Dan Smalley, Tom Williams, and Jason Lawrence of Itiviti, a Broadridge Business.