The prospect of hedge fund regulation holds no fears for one of the Island's major industry players the Jupiter Asset Management (Bermuda) Ltd., which is celebrating 40 years on the Island.

The company's managing director Garth Lorimer Turner says it is well placed to deal with any regulatory clampdown thrown at hedge fund managers in the aftermath of the 2008 market crash.

Jupiter Bermuda is seeing signs of increasing interest from institutional investors as markets stabilise and Mr. Lorimer Turner believes investment prospects are very good for those with a three to five-year window.

Hedge funds, pools of capital with mainly sophisticated institutional investors and high net worth individuals, tend to be loosely regulated. But after last year's near meltdown of the financial system, politicians intend to enforce tighter regulation across the financial services industry, including hedge funds.

Jupiter Bermuda grew out of the London-based Jupiter Group, a major regulated retail funds operator - roots that will stand it in good stead in the imminent era of increased scrutiny, Mr. Lorimer Turner said.

"Jupiter's main operation is in the UK and is regulated by the Financial Services Authority," Mr. Lorimer Turner said.

"In Bermuda we try to do things as if we were also regulated by the FSA.

"I think that when hedge fund "I think that when hedge fund regulation does come in, it's not going to be easy for the majority of hedge funds to satisfy the regulators. But I'm confident that we will be able to do it."

Until last year, hedge funds had generally been producing healthy returns, with flexible formats designed to allow them to make money whatever direction the markets were headed. Hedge fund managers traditionally charge hefty fees.

Last year, according to the Chicago-based Hedge Fund Research, hedge funds lost 19 percent amid some of the most treacherous market conditions ever seen. Some funds ran into liquidity problems and locked down their funds because they could not meet redemption requests.

"We were able to honour all redemption requests and we had no liquidity issues," Mr. Lorimer Turner said.

"One of the lessons learnt has been that performance is no longer the only selling point. Corporate governance, risk management and transparency are three key areas that institutional investors, in particular, are very interested in.

"We have dealt with institutional type investors for a long time, and they're always going to ask searching questions about things like your risk management framework. So in many, ways, when regulation comes in, we will be well placed."

The whole funds industry was under pressure to reconsider its fee structures, after so many investors were hit by losses last year, Mr. Lorimer Turner said.

Jupiter Bermuda, which has around $30 billion of assets under management, charges a 1.5 percent management fee and a 20 percent performance fee, subject to achieving a pre-determined level of performance.

"Investors are happy to pay for performance and when the performance is not there, questions are asked about what they are paying fees for," Mr. Lorimer Turner said.

"I think the important thing is to be able to provide a high level of service. Not all hedge funds can say they have a portfolio analytics team and a compliance department, as Jupiter Bermuda can, for example."

The Jupiter Bermuda operation started life through an Act of Parliament in 1969, when it was called Guardian Management. It has gone through several names since then and became Jupiter in 1985 when the group took over the Tyndall Group.

The unit employs 13 full-time staff, of which 10 are Bermudians. Several are long-serving, including Marion Darrell, who has been with the company for 20 years, and Gena Smith, who has worked there for 18 years.

Mr. Lorimer Turner, who has been with the Bermuda operation for eight years, said he was "immensely proud" of his team and felt lucky to work with them.

US stocks have soared more than 30 percent from March 9 lows, with the pullback that many expected yet to materialise. Asked whether this was a bear market rally, or the start of a bull market, Mr. Lorimer Turner said: "Jupiter believes this is a hippopotamus market - aggressive rallies followed by periods of entrenchment, in which the market does not display any direction.

"Hopefully the markets are finding a level where they can stabilise. If you can invest for a three- to five-year time period, then we believe there are some extremely attractive opportunities.

"Emerging markets appear to offer more opportunities than developed markets, maybe because they had such a large sell-off and they are being driven by domestic demand." India, in particular, was o market to watch, he suggested.

Jupiter is unperturbed about the attention being paid to offshore financial centres by the Group of 20 leaders of the world's biggest economies and the labelling of Bermuda as a "tax haven" by the Organisation of Economic Co-operation and Development (OECD).

"It's never nice to see fingers being pointed, but it's just sensationalisation most of the time," Mr. Lorimer Turner said. "It's a product of political manoeuvring, attacking offshore jurisdictions to try and deflect attention from their own problems.

"It's misleading because Bermuda stacks up with any jurisdiction out there."

He said the OECD had apparently ignored the progress made by the Finance Ministry, which had now concluded 15 tax information exchange agreements (TIEAs).

While Bermuda's position on the OECD "grey list" was "unfortunate and unfair", its stay there will be short-lived, he added.