Re: maybe lets be less moderate....

From: Steve Kenny
Affiliation: Reuters
Address: steve.kenny@reuters.com
Date: 17 Aug 2007
Time: 16:39:49

Comments

I think you are being a bit harsh on the Hedge Fund industry. Like most critics you hold them to an impossible standard. You over emphasize the failures and say just wait and see for the successful. Name one industry, sport, or association where everyone is honest and successful! The problem I do see with the Hedge Fund industry is accountability. Many hedge funds are started on a shoe string, or are created by wealthy families to give junior a job. These are the funds that are most likely to fall apart and many of the do, as you have stated. I have worked with many hedge funds around the county and would break them down this way. About 1/3 are highly organized and sophisticated and employ excellent VaR management software to monitor their risk. About 1/3 are run by very capable intelligent managers that are a bit more free handed in their management techniques. The last 1/3 of the hedge fund managers are flying by the seat of their pants. The top two groups can afford to purchase the market intelligence and software packages necessary to add value and sustain above average returns.

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