If a new Congressional bill gets passed as is, one person would not be allowed to run both a mutual fund and a hedge fund, The Wall Street Journal reports.
Rep. Richard H. Baker (R-La.) wants to alter the Mutual Fund Transparency and Integrity Act to bar dual management in mutual and hedge funds. He said in testimony last week that the conflict of interest is "unacceptable."
His reasoning is the higher fee scale of hedge funds that would tempt managers into placing top investment strategies in them rather than mutual funds in order to see a better profit.
Opponents of Bakers suggestion, including many fund firms, say that disallowing the management of a hedge fund would cause many competent managers to leave in order to secure more lucrative money.
"If we have a talent like Babe Ruth in the money-management industry, we undermine that talent by telling him you can't be good at pitching and hitting," Rick Lake, co-chairman of
The
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The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.
