Hedge funds can be a force for good and should be protected against the corruptible force of … European Union regulations. That's the view of the Church of England, according to British media reports.
The church is smarting from a $2 billion drop in its investment fund and its commissioners are now rallying to support the beleaguered and often loathed industry, reports said.
In a letter to the House of Lord’s EU select committee, the commissioners voiced “serious concerns” about plans to tighten regulations for hedge fund investment, the Financial Times said.
“We are concerned that the directive as currently drafted will significantly restrict our ability to generate funds to pursue our charitable missions and thus reduce our impact for public good,” the letter said, according to the Times.
The move marks a dramatic shift in attitudes for UK church leaders, some of whom railed against the industry in the wake of the financial crisis.
The Archbishop of York, Dr John Sentamu, called short sellers of bank shares "bank robbers" as market watchers reeled from the credit crunch last year, the Telegraph pointed out. And the Archbishop of Canterbury, Dr Rowan Williams, joined the criticism recently by saying financiers had shown no "repentance" for their excesses, the report said.
The church has lost a large chunk of its cash since the crisis. The value of its investments has fallen from $9.1 billion in 2007 to $7 billion in 2008, accounts filed in May showed, according to a Financial Times report.
The EU Alternative Investment Directive is looking to stop managers from outside the EU from pitching their services to EU-based investors, according to the Telegraph report.
The church's investment arm said the plans would mean they couldn't "maximize the returns on our investments," the Telegraph said. The commissioners added they wouldn't be able to "select the best investment managers and funds, and to select the investment ideas that best meet our individual needs," the report said.