Former SEC Chairman to Start New Hedge Fund

Stephen Harris

14 September 2005

Richard Breeden, former chairman of the US Securities and Exchange Commission, and a major advocate for corporate governance, is starting an activist hedge fund. Breeden Partners will seek to profit from companies that improve their corporate governance and is expected to start trading early next year. It is seeking to raise between $500 million and $1 billion and will hold large positions in the companies in which it invests, holding 6 to 12 investments at a time. Investors will have to put up at least $5 million, and will be able to redeem the funds initially after two years, and thereafter annually. In June 2002, Mr Breeden was appointed by a bankruptcy court to be the monitor of WorldCom, now MCI, the largest bankruptcy in history. Recently, US federal regulators appointed him to be a corporate monitor for KPMG, the global accounting firm that recently reached a $456 million settlement with federal prosecutors investigating the firm's role in illegal tax shelters. He intends to carry on in this role. Breeden Partners will charge a 2 per cent management fee and take 20 per cent of profits, according to marketing documents.