According to the BBC, new EU rules to regulate bank bonuses – announced on Thursday – will hit Mayfair hard: the onerous restrictions on pay, says Robert Peston,

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Heartened by improved market conditions, new hedge fund launches picked up again in the third quarter and exceeded the number of liquidations for the first time since the height of the financial crisis.

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Hedge-fund assets stood above the $2 trillion mark for the first time in a year in November, driven by continued gains and fresh capital moving to the industry, according to data collector HedgeFund.net’s early estimates.

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It wasn’t too long ago big-time hedge fund managers like James Pallotta were erecting monuments to themselves. In Pallotta’s case, it was a $21 million Georgian-style mansion he built in 2007 in Weston, a leafy Boston suburb uncomfortable with such displays of wealth.

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What will hedge funds do if large governments start to regulate their activities, tax them at higher rates, and make them disclose their holdings? Places like New York City, Greenwich, and London may find that the financial firms have “left the building”

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Angry investors may feel vindicated as President Barack Obama seeks to raise taxes on hedge fund and private equity fund profits, but critics caution the proposal will not raise significant money for years and may be watered down or fail to pass Congress.

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We believe that hedge funds greatly contribute to undesirable levels of speculation and hence instability, rather than to what is supposed to be their true purpose, knowledgeable investment. Their deleterious effects could be greatly reduced or eliminated by two significant, but obvious, reforms.

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Investors pulled a record $155 billion out of hedge funds last year, punishing the once red-hot asset class for delivering its worst-ever returns, according to numbers released on Wednesday.

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Hedge funds are suffering a New Year hangover of record proportions after an end of year rush to suspend or restrict withdrawals of money and the first of what is expected to be a wave of closures.

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Bond dealers and hedge funds that fail to complete trades in Treasury securities face a penalty of as much as 3 percent on the proceeds of transactions.

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