A first decisive step to follow and accompany

On the one hand, the "Google", brandished as colours of an innovative and healthy economy. On the other, "hedge funds" and hedge funds, which would be opportunistic and amoral, gravediggers of finance. This vision is largely maintained by certain media to the point of having become a common public opinion doxa. "hedge funds" are presented as a threat to the entire economy, while enjoying some "happy few" finance, jealous of their fiefdom and opaque methods. With the collapse of LTCM in 1998, and those recently "amaranth advisors", platoon ABS and Carlyle Capital Corp. who took with them $ 30 billion, alternative management is in fact not the first scandal drags with it for several years a sulphurous reputation.

With more than 1,100 billion managed in 2007, "hedge funds" are certainly as a destructive force, but in the sense of the concept of "creative destruction", inherent, as explained by Joseph Schumpeter (1883-1950), the logic of the capitalist system. In this sense, the optimal allocation of capital, salutary and necessary for economic progress, is not questioned, and what is alleged to "hedge funds" is other than a lack of transparency and their opacity relative.

At a time when stock markets lose confidence, that the volatility flies and that the word "crisis" is at the top of the most cited words by the financial press, HFSB (Hedge Fund Standard Board) or code of good practices to improve the transparency of the Fund, initiated earlier this year by sir Andrew Large former Deputy Governor of the Bank of England just timely. The HFSB has managed the feat to convince the leaders of the 14 most important representatives of this industry (among them, Marshall Wace, GLG, Man Group) self-regulating to cover any necessary credit to investors but especially to avoid an exogenous regulation. Revel, the specialist press as this industry experts welcomed the work of the HFSB, which is reached to move the cursor of self-regulation to a level that will lead to greater transparency notion that Warren Buffett define such as 'tell investors what we would like to know if we were in their place' without however rein in these "forms" of the asset management.

Among the main measures proposed, two seem us particularly important: the prohibition of "hedge funds" to the porting of the voting rights and consisting of recommendation to the quarterly assessment of the assets, according to an "evaluation policy" (or harmonization of the methods used) by a third party (independent and qualified expert) to avoid any conflict of interest. These recommendations will no doubt case law in the very select world of "hedge funds". Beyond, they will lead also some "private equity" funds to ask, as a whole, the issue of financial disclosure, to apply best practices expected by investors and other market players. Thus, such standards in matters of evaluation of the assets under management have, in our view, a promising future before them, especially in this period of financial turmoil marked by a crisis of investor confidence.

Equally important, these measures satisfy the many Governments that singled out alternative management, even one who has both made, either from the strict point of view of financial funding more general of economy innovation. Finally, concerning the lifting of capital, it goes without saying that these standards of transparency would be as barriers to entry that would not apply this code of conduct of the profession of alternative Manager.

In the end, fourteen "hedge funds" signatories to this code well took note of the lack of confidence that the market give and, to address this, decided together remarkable fact ! commitment to greater transparency to their customers, it should logically be accompanied by a central role occupied by the independent evaluation. A first, decisive step, to follow and accompany.