“Healthy discontent is the prelude to progress.” – Mahatma Gandhi
There can be little doubt that healthy discontent was one of the many emotions being experienced by hedge fund practitioners and professionals in the year 2012, when Globe Law and Business published the first edition of Hedge Funds. At the time the financial system and the broader economy were both licking their wounds and slowly emerging from the financial crisis that had engulfed the global economy at the end of the previous decade, and the Dodd-Frank Act was still new on the scene, with many of its implementing rules and regulations yet to be promulgated (of course, that is true to an extent even in 2019). It is in 2019 that Globe Law and Business has published the second edition of its eminently useful guide.
As Hedge Funds reminds the reader, the global hedge fund industry’s assets under management increased over 61% between the publication of its first and second editions. During that period not only have domestic regulatory authorities issued many of the rules and regulations contemplated by Dodd-Frank, their foreign counterparts have also issued and revised numerous rules and regulations affecting the hedge fund industry. It is against this backdrop of growth and maturation both of the hedge fund industry and of the regulatory framework governing it that the second edition of Hedge Funds was published earlier this year.
The book acknowledges and addresses these changes admirably, serving as a helpful overview for those new to the regulation of hedge funds while also providing much of value to seasoned practitioners. Not only does the book cover fundamental concepts such as hedge fund formation, common fund features and the risks to which hedge funds are subject, it delves into timely areas such as cryptocurrency regulation and the effects of Brexit. The book examines all of these topics alongside a detailed narrative describing the regulatory framework governing hedge funds and that framework’s ongoing evolution. While much of the text is focused on hedge fund regulation in the United States, the book also includes helpful chapters discussing the regulatory environments of numerous other countries, including the Cayman Islands and the United Kingdom, among others.
Unlike some of Globe’s other treatises, for example, the excellent Credit Derivatives: Documenting and Understanding Credit Derivative Products, each chapter of Hedge Funds is penned by a different author or authors. While this creates some differences in styles of writing and presentation, the differences are not problematic and the authors are without exception highly qualified and well-versed in the respective subject matters on which they write.
Whether or not the issuance of more rules and regulations is considered “progress” will depend upon the perspective of the reader, but there exists a reasonable argument that more targeted, appropriate regulation of the hedge fund industry will benefit hedge funds and investors alike. Likewise, inasmuch as growth is considered progress it is clear that the hedge fund industry itself is progressing. And while progress may not be inevitable, change is, and the practitioner looking to keep up with the regulation of hedge funds and changes in that respect would do well to have a copy of Hedge Funds available on his or her bookshelf.
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