The finance ministry is to begin an investigation into how active hedge funds and private equity groups are in the Netherlands, finance minister Wouter Bos said at the weekend.
The announcement by Bos followed an EU finance ministers’ meeting in Berlin. ‘Some people say their [hedge funds and private equity firms] activities only account for 1% of the economy. If that is so, then we don’t needed to revamp all our financial legislation,’ Bos said.
Hedge funds have become a controversial issue in the Netherlands in recent months following their efforts to force several Dutch companies to split up.
Stork and ABN Amro are currently under attack from hedge funds, while newspaper group PCM was bought and sold again by private equity group Apax.
Bos said hedge funds could be useful in forcing companies to improve their performance and boost efficiency. ‘But do such active shareholders damage the interests of workers, management and customers?,’ Bos asked in today’s Volkskrant.
‘We have to ask if bonuses and golden handshakes are becoming bigger because of hedge funds and if long-term strategic thinking is being rendered useless by the funds’ demands for quick returns,’ he said.
This weekend’s EU meeting focused on the need for more transparency by hedge funds. Ministers plan to draw up a voluntary code of conduct which they hope the big buy-up funds will adhere to.
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