UK hedge funds unlikely to follow U.S. funds in suing Porsche
By Andrew C., 30 Aug, 2010. 0 Comments
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UK hedge funds are not expected to file a suit against Porsche Automobil Holding SE similar to what US funds have done because there is a move for them to reach a compromise in Europe over tough new rules for the industry, according to sources. Last Monday, a group of US funds filed a complaint alleging market manipulation during Porsche's attempted takeover of Volkswagen AG.
In October 2008, it was revealed that Porsche controlled about three quarters of VW's voting stock, triggering a vicious short squeeze that hurt short-sellers. The U.S. legal action is said to come at a critical time for London, which is home to 80% of Europe's hedge fund managers. There has long been a struggle between Hedge fund executives and UK politicians to try and tone down draft EU proposals put forward last year for tight regulation of the industry.
They are currently aiming to reach a compromise with countries such as Germany that support tough rules. A source familiar with the matter denied awareness of such a move by UK managers. David Stewart, CEO of Odey Asset Management, which had been short selling VW at the time, disclosed that his firm didn't plan to get involved.
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