Hedge Fund Management Companies

Hedge Fund Management Companies

Hedge Funds More Appealing Than Their Management?

Matthew Lynn presents an interesting argument for investing in hedge funds but not their management companies.   He finds that hedge funds, not their managers, have the most appeal for investors, and that hedge funds are better off staying private rather than trying to entice traditional investors to buy stock.  The fact that public hedge fund management firms are still struggling while their funds have made sizable gains this year supports his idea.
Investors should invest in hedge funds. Many of them will do very well. But they probably should steer clear of the companies that run them.
Two of the most dynamic hedge fund managers in London, RAB Capital Plc and Charlemagne Capital Ltd., have both seen their shares soar this year. But when you consider how beaten down they were, that isn’t much consolation.
RAB was one of the most successful of London’s new breed of hedge funds. At the peak in 2007, its shares touched 126 pence. Now they are worth less than 20. During the worst of the credit crunch they went all the way down to 6 pence.
Shares in Charlemagne, which specializes in emerging market funds, climbed to more than 100 pence at their peak in 2006. They are now trading at 16 pence, after reaching 7 pence when the market was at its worst.   Read the whole article here

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