Mon, Dec 5, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: Hedge funds – Reasons to love them, reasons to hate them

Wednesday, March 11, 2009

This article was authored by Bryan Goh, First Avenue Partners LLP, London.

The hedge fund industry has come under a lot of fire in the last 12 months. They have been blamed for falling markets, failing banks, rising costs of credit, bad weather, you name it. But while it is easy to target an industry where a hedge fund manager can earn millions in a year, what do we really love them for and what do we really hate them for? We know that they are clearly not responsible for the troubles in the banking industry. The weather is another matter…

While I have defended the performance and relevance of hedge funds, there are areas where hedge funds have been deficient.

Why we hate hedge funds:

Style drift is a major major complaint. Style drift is when your equity long short manager starts trading credit, or fixed income or starts buying unlisted private companies. Style drift is, however, hard to define and hard to police. Is an equity manager with a very fundamental bottom up process guilty of style drift if he chooses to express his view on a company by buying preferred shares? Or the bonds issued by the same company? Blatant style drift is rare and easy to detect if you know what you are doing, but even experienced due diligence people can be eluded or deluded by more subtle types of style drift. Is someone who trades convertible bonds for their volatility characteristics guilty of style drift i......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. M&A - AllianzGI to acquire Sound Harbor Partners, SS&C completes acquisition of Wells Fargo's Global Fund Services business[more]

    AllianzGI to acquire Sound Harbor Partners Allianz Global Investors (AllianzGI), an active investment manager, announced that Sound Harbor Partners, a US private credit manager led by Michael Zupon and Dean Criares, have agreed to join its fast-growing Private Debt Platform. Under the te

  2. Europe - UK investors to pay more tax on money in offshore funds, Do you want to hand your money to super-algo or a Swiss banker?[more]

    UK investors to pay more tax on money in offshore funds From FT.com: Hedge funds in Dublin and Luxembourg are set to be hit by new rules that will force UK investors to pay more tax on the money they hold in offshore funds. As part of the government’s Autumn Statement on the country’s fi

  3. Hunt for yield pushes more investors into riskier assets[more]

    From FT.com: Pension funds and insurance companies have increasingly embraced riskier assets in their hunt for higher returns over the past five years. Alternative assets such as property, infrastructure, private equity and hedge funds have been bought up by institutional investors in a world where

  4. People - Nectar Financial hires senior investment team, Texas A&M replaces retiring foundation investment chief, Ex-Cadwalader partner Woolery makes another sudden exit, How to become a Python coder at a top hedge fund, by the co-CTO of Man AHL[more]

    Nectar Financial hires senior investment team Nectar Financial AG, a Swiss financial technology company for wealth and asset management, has announced that it has hired two key senior leaders to spearhead its digital asset management efforts. The company also announced that it has entere

  5. Activist News - Cognizant has introductory discussion with activist investor Elliott; to review letter, Starboard Value makes huge investment in Hewlett Packard, Hedge fund calls for removal of First NBC Bank CEO[more]

    Cognizant has introductory discussion with activist investor Elliott; to review letter From Indiatimes.com: Cognizant said it had an introductory discussion with Elliott Management after receiving the activist hedge fund's letter asking for a board shakeup, a buyback, a dividend and chan