The Morningstar Convertible Arbitrage Hedge Fund
Index rose 2.
Richard Bortnick, an insurance litigation specialist with the law firm Cozen O'Connor, said that when a hedge fund
implodes, insurers may be on the hook for some of the risk.
Among the issues which top of the list for the financial services industry is the generic question of how to get better counterparty risk data, especially for hedge funds
and other organizations involved in Complex Structured Financial Transactions (CSFF) and Over-the-Counter (OTC) derivatives.
What makes the hedge fund
pay packages all the more shocking is that hedge funds
are a source of the grumbling about CEO compensation.
It sends an appeasing message to investors that this is not a fly-by-night operation," says Hrant Tosbath, President of The Davenport Group, which specializes in hedge fund
investment and marketing.
Most investors are also aware that hedge fund
portfolios need to consist of at least 15-20 managers broadly diversified across strategies.
For CPAs advising clients on hedge fund
investments, the key, of course, is in choosing funds managed by astute professionals with a high level of expertise, a consistent track record and a good understanding of alternative investments.
While the Dow, S&P 500 and Nasdaq dropped 6, 9 and 39 percent, respectively, the average hedge fund
rose 8 percent.
The extent to which the LTCM relationship was an exception to banks' normal hedge fund
Greenwich Alternative Investments manages one of the world's largest hedge fund
databases and is among the oldest providers of hedge fund
indices, asset management services and research to institutional investors worldwide.
surged from eighth place in the overall 2004 All-America team to third place in the hedge fund
tabulation, with 31 team positions.
investment advisor George Van told Chief Executive he anticipates that flat returns next year will drive between 500 and 750 hedge funds
out of the market by the end of 2003.
When shooting for absolute performance, a hedge fund
might sell short, use leverage, trade put and call options, trade futures and invest in emerging markets.
In some cases, banks also organize and advise overseas funds that would meet the general definition of a hedge fund
Using rules to avoid the cost of active hedge fund
management is the same principle that helped passive index funds (such as ETFs) gain market share from actively managed mutual funds," said Heiko Ebens, head of the Americas Equity Derivatives Research team at Merrill Lynch.