US Hedge Funds Mull Public Listing

by Carla Johnson, Investors Offshore.com

29 March 2005

Chicago-based hedge-fund manager Grosvenor Capital Management, with assets over $13 billion, is considering a public listing, says Reuters. The firm itself wouldn't comment.

Grosvenor is just one of a number of major US hedge fund firms said to considering IPOs. It's another question whether this is a response to the trends which will anyway force more transparency and disclosure for US hedge funds, or whether it means that hedge fund managers think it will be easier in future to get money from share-buyers than from profit-based fees.

The SEC's new hedge fund registration scheme will swing into action next year, and will require almost all US-based firms to accept stringent disclosure rules. A public listing is a step further in terms of transparency and accountability, but is in the same general direction.

Hedge funds have had a recent demonstration of what to expect from the SEC with the efforts of Christian Baha, the founder of Quadriga to launch a hedge fund. The SEC took eight months to approve a television ad, severely restricted its content, and would not even let Mr Baha use the term 'hedge fund'.

Few hedge fund firms are publicly held. The most obvious exception is Europe's Man Group. London-based Man Group, the world's largest publicly traded hedge fund manager, revealed growth in assets under management by $3.6 billion in the final quarter of 2004 to $42 billion.

"We had seen 50% per annum growth for a few years but we have told markets this (growth rate) would shrink. At the end of a year when we had mixed performance and maturity of a large fund, we are very pleased," remarked Man chief executive Stanley Fink. Man's shares have seen their ups and downs, but overall have performed well.

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