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Alternative Market Briefing

Other Voices: Does the hedge fund industry benefit society?

Wednesday, March 25, 2015

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Don Steinbrugge
This article was authored by Don Steinbrugge, Chairman of Agecroft Partners, a US-based global consulting and third party marketing firm for hedge funds.

It is no secret that the hedge fund industry is viewed negatively by a large portion of the general public, but should it be? Such a perception is driven primarily by the fact that most hedge funds are not permitted to market themselves to the general public, and because the mainstream media has a negative bias toward their coverage of the industry. The average person is inundated with negative articles creating the image that: 1.) Most hedge fund managers are dishonest and frequently commit fraud or violate insider trading laws. 2.) Hedge funds are highly risky investments. 3.) Their devious actions are bad for the general public. 4.) Hedge funds generate bad performance and their fees are too high.

Is the general’s public perception of the hedge fund industry equal to reality? Let’s take a closer look at each one of these points:

1. Is the average hedge fund manager dishonest? Of course not. The industry is not comprised of a bunch of Bernie Madoffs, as many people would believe. Agecroft Partners estimate that there are more than 15,000 hedge funds in the market place and a vast majority of these are run by honest business people trying to do the right thing for their clients. The reality is that multiple times more mo......................

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