Man Group Critical of German Hedge Fund Disclosure Rules

Stephen Harris

1 September 2005

German disclosure rules requiring fund managers to reveal their trading positions have damaged investors' returns, according to Man Group’s top executive in Austria, Andreas Benz. "We have to disclose so much, in such detail, that it destroys some of the performance," Mr Benz was quoted as saying by Bloomberg. The London-quoted hedge fund giant wants to expand its German business after the country last year began allowing individuals to invest in funds of funds. Fund managers must produce reports twice a year giving details of each trade made by each of the funds in each fund of funds. This massively increases cost of doing business, said Mr Benz who joined Man in 2000 from JP Morgan. But it is not the cost of putting the information together that worries the hedge fund industry. If individual trades are being disclosed, it is much easier for competitors to work out a trading and investment strategy. And when you are dealing with the huge sums involved in the often secretive world of hedge funds this can affect your ability to trade effectively in the markets. As much as $2.2 billion is invested in hedge funds in Germany, according to estimates by Bundesverband Alternative Investment, an industry group.