Hedge funds in Obamaland

Mon Jun 1, 2009



From the Chrysler bankruptcy to pending regulations, the industry finds itself playing catchup.


From the Chrysler bankruptcy to pending regulations, the industry finds itself playing catchup

By Michelle Celarier

When the Obama administration flexed its political muscles against hedge funds during the Chrysler bankruptcy brouhaha, it came as a rude awakening to many in the industry. The rules of the game appear to be changing - sometimes quite dramatically - on everything from regulating leverage and short sales to bankruptcy and distressed investing. Even as the industry's main lobbying group, the Managed Funds Association, moved finally to embrace registration last month, the political issues raced ahead.

"I was shocked," says one of the self-described non-TARP lenders who initially refused to cave in to the administration's demands to accept 29 cents on the dollar to avoid a lengthy bankruptcy that would spell doom for Chrysler. "Obama's out there on national TV threatening to crush us. This is Banana Republic behavior," he hyperventilates. President Barack Obama called...

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