While I maintain that Goldman Sachs will barely be affected by the Volcker Rule, that doesn’t mean Wall Street won’t be forced to spin off some of their trading assets. And guess who’s waiting in the wings to lap up this business? Crain’s writer Hilary Potkewitz has an answer:
Potkewitz provides some anecdotal support:
Less than two weeks ago, Bank of America sold a $1.9 billion private equity portfolio to French firm AXA Private Equity. The bank claims the sale was part of a strategy to reduce its private equity holdings and manage long-term risk.
And last week, a report surfaced that J.P. Morgan Chase was making preparations to sell its hedge fund unit, the $21 billion Highbridge Capital, should the Volcker Rule pass. The bank did not return calls for comment.
Meanwhile, there has been nary a peep from hedge fund executives during the past month’s regulation frenzy. They don’t want to jinx a good thing.
In the context of hedge funds profiting from Democratic regulation, it’s worth recalling some of the history of the Dems and the hedge funds.
First, there was this meeting, back when Schumer told hedge funds they needed to come to the Washington altar a bit more.
Then there was the Managed Funds Association lobbying up like crazy, and retaining Schumer’s banking staffer as a lobbyist.
That staffer, Carmencita Whonder, is a top bundler for Schumer, as is the Managed Funds Association.
It’s hard not to see this as a case of Schumer asking the hedge funds for protection money — and then providing the protection in the form of regulation.
Potkewitz sees something similar to what I see:
