A group of the largest US hedge funds has called on the Bank of England to intervene to free an estimated $65bn in assets frozen in London in the collapse of Lehman Brothers, warning that delays “could be disastrous for UK plc”. The funds, through the Managed Funds Association, said the scale of the problem was so great it could undermine bank rescue plans as tens of billions of dollars would be kept out of the market. It was also likely lead to the failure of some fund managers, said Richard Baker, chief executive of the MFA. The warnings come as hedge funds have been quietly shifting billions of dollars of assets out of London to the US, claiming the US legal system provides greater protection. Administrators at PwC running Lehman’s UK business have won court approval for a process to work out how much they hold in protected assets but have warned it could take years to finalise.

This entry was posted by Gwen Robinson on Thursday, October 16th, 2008 at 5:37 and is filed under Capital markets, Hedge funds. Tagged with Lehman Brothers, MFA. Edit this entry.