March 23: FSA tightens up on hedge funds
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March 23: The FSA is tightening up its oversight of hedge funds but is also proposing to allow retail investors to invest in funds of unregulated funds, including hedge funds. The regulator says it wants to look closely at how hedge funds value their assets, especially the less liquid ones, and is proposing that side letters giving some investors better terms than others be disclosed properly. It amounts to a pretty sensible set of proposals which should do nothing to prevent London continuing to attract an increasing share of the world’s hedge fund assets – a trend the FSA seems justifiably proud of.
Wm Morrison posted its first full-year loss in its 107 year history as it continued to feel the effects of its ill-judged takeover of Safeway. The group sketched out an “optimisation plan” but a sketch is all it was in the absence of a new no chief executive. There was a promise to improve gross margins by 90 basis points over the next three years. But this is dependent on Morrison cutting unspecified amounts of costs and meeting very vague promises about sales growth.
Next’s annual profits were at the top end of expectations but trading in the last seven weeks has been truly ghastly. The retailer, which once could do no wrong, seems to be being whacked by Primark and M&S and seems to be doing some odd things, such as selling electrical goods on its website. This, as a colleague put it at today’s press conference, is like invading Russia in the winter.
We’ll do plenty on Rod Aldridge stepping down at Capita, the support services group he built up. This follows suggestions that a loan he made to the Labour Party resulted in his company’s being awarded government contracts, suggestions he says are “entirely spurious”. Capita shares are off 3 per cent as a result. Aldridge was clearly naive to think that no connection, however erroneous, would be made. But that doesn’t mean the outcome isn’t a shame for his company.
I’m very keen, also, that we do more on Gordon Brown’s plans to make it easier for property companies to convert to real estate investment trusts. Jim Pickard is picking through all the gory details and, I’m confident, will tell us all what it means for the companies in the sector in tomorrow’s paper. Land Securities has given up some of the gains it put on yesterday.
British Airways has announced plans to cut its gigantic pension fund deficit by injecting £500m into the scheme, raising retirement ages and capping pension increases. So far the response from the unions is lukewarm. You can tap into what the pilots think online. The shares are unchanged.
De Vere, the hotels and leisure group, has received a takeover approach. The stock is up almost 10 per cent. It isn’t clear whether this has come from NH Hoteles, as the Guardian market report suggested this morning, or if it has come from Blackstone. One can’t completely discount the idea that Lord Daresbury might want to take the business private again but I have no idea if that is what is going on this time.
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