GFS LinkedIn
GFS Facebook
GFS Twitter
GFS RSS feed

The Big Interview: Todd Groome

Wednesday 9 June 2010 - by Nicola York

 The Alternative Investment Management Association chairman talks to GFS about the damage the AIFM directive could do to the industry, what is wrong with Brussels and the future of alternative investments

Todd Groome has an impressive CV. After over 20 years in the private sector with stints at Credit Suisse, Deutsche Bank and Merrill Lynch, he then joined the International Monetary Fund as head of the financial stability division.

In his five years there, he focused much of his time on non-banks and put together a lot of work on hedge funds for the G20 meeting called by former US President George Bush in Washington in November 2008.

Groome became chairman of Aima at the end of 2009. He is also a lawyer, managing director of Diversified Global Asset Management and a visiting scholar at Wharton School, University of Pennsylvania.

Aima has over 1,100 member firms in over 40 countries, managing more than 75 per cent of global hedge fund assets.

Groome says he has to address issues from three geographical perspectives in his role as chairman of the global representative of the hedge fund industry; the global, the US and Europe - though not in that order, he hastens to add. Right now, Brussels is number one in terms of priority because it is “the biggest challenge for us”.



He stresses that the organisation is not against regulation, increased oversight and supervision or increased transparency to investors, markets and supervisors. He thinks hedge funds have an important role to play in giving a comprehensive picture of the financial stability of markets.

He says: “That is not because we think that hedge funds or a group of hedge funds are systemically important or create unique systemic risk; they don’t. The G7 came to that conclusion in 2007 and the FSA, the Financial Stability Board and the senior supervisors group too.

“They found that from a counter-party risk perspective, hedge funds do not create new risk, so they are not the problem. But hedge funds as a mature industry through these reporting systems that we are putting in place can probably contribute as well or better than others to building up a picture of what markets are doing, because they really do look across markets and institutions, they evaluate their counter-parties in a very aggressive way. If they get it wrong, nobody is going to save a hedge fund. So they are the true free market discipline that you can rely upon because for them it is make or break.”


Article pages: |   1  |  2  |  3  |  4  |  5  |  6  |



WHAT DO YOU THINK?
 
Name:
   
Email:
   
Comment:
   
Post as Anonymous
  Display name
   
Please, enter security code
   
 

No comments yet.
INTERVIEWS & FEATURES
What corruption really costs
Heidi Lawson, partner at Chadbourne & Parke LLP, looks at the impact of compliance and corruption on a company's value.

STRAW POLL

Will markets in 2012 have a tougher time than 2011?

Yes

No

Don't know

View results

FIND A REGION world regions