AQUELE VIGARIO…

AQUELE VIGARIO…

Hedge funds win Church of England blessing. October 6 2009 20:18. Barely a fortnight after attacking the modern day equivalent of biblical money changers in the City of London, leaders of the Church of England have sprung to the defence of an oft-reviled pillar of the finance industry. While greater regulation of some sectors of the industry is necessary, the church has concluded that hedge funds are still needed to maintain the temple. In a letter to the House of Lord’s EU select committee, the church commissioners – the custodians of its ancient wealth – raised “serious concerns” about new plans from the European Union to regulate hedge funds. “We are concerned that the directive as currently drafted will significantly restrict our ability to generate funds to pursue our charitable missions and thus reduce our impact for public good,” said the letter. The plea comes after a disastrous year for the church’s investments. Accounts filed in May show the value of the investments dropped from £5.7bn in 2007 to £4.4bn in 2008. The commissioners – who include both Rowan Williams, the archbishop of Canterbury, and John Sentamu, the archbishop of York – were backed by other charitable foundations. The Wellcome Trust, the Paul Hamlyn Foundation, the Nuffield Foundation, Esmée Fairbairn Foundation and the Henry Smith Charity – between them managing £15.1bn of charitable wealth – also signed the letter. “Maximising the returns on our investment portfolios is an essential part of delivering our foundations’ missions, for the benefit of society,” said the letter. “The draft directive, while well-intentioned, threatens this goal.” The foundations singled out three areas of concern: proposals to limit EU investors to investing in EU-domiciled funds, requirements for funds to use EU-registered depository banks, and limits on funds’ use of leverage. Instead of “imposing restrictions” which would “reduce our freedom”, said the foundations, the EU should concentrate on enforcing transparency, in order to enable investors to “make a judgment”. At the height of the financial crisis last September, Dr Williams said it was right to ban short selling, while John Sentamu called traders who cashed in on falling prices “bank robbers and asset strippers”. Hedge funds pointed out that a large portion of the church’s endowment was invested with them.