Who’s more interested in “secrecy” – hedge fund managers, governments, or corporations?
Nov 4th, 2008 | Filed under: Hedge Fund Regulation, Today's PostIt’s easy to assume that hedge funds are totally obsessed with secrecy. In fact, one might be excused for believing that the lack of regulation and resulting lack of transparency is what makes a hedge fund a hedge fund. In its report on the upcoming Congressional hearing involving five of the highest paid hedge fund managers, the magazine “Congressional Quarterly Weekly” (not a typo) describes secrecy as:
“…a prerogative that fund managers jealously protect in order to keep competing funds from appropriating their business strategies.”
But do hedge fund managers really rely that much on secrecy to produce their returns (as Bloomberg’s Matthew Lynn suggested in this column last year)? Wouldn’t all managers – including ones of the long-only persuasion – also want to keep their investment ideas a secret? NYU’s Stephen Brown questioned CQ Weekly’s assumption, telling the publication:
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