Watch out hedge funds, Germany is still on to you. This is the message of an interview chancellor Angela Merkel gave to a German magazine to be published this week, saying she will finalise in spring 2008 a "self-regulatory declaration for the hedge fund sector".

The private equity industry took a lot of the political heat that might have been directed at hedge funds this year, with angry debates about tax overtaking concerns about hedge fund transparency. But Merkel's comments, confirmed by the German government and due to for publication in Capital magazine tomorrow, show political interest in hedge funds has not gone away.