The Guardian – When it comes to investing, hedge funds can do almost anything. They just can’t talk about it.
In return for the right to rely on trading techniques that are largely off limits at mutual funds, hedge funds have for decades been prohibited from marketing or advertising broadly.
Now some managers in the $1.8 trillion industry are pushing for new leniency — not to sell themselves but at least to tell a little bit more about themselves.
Fund manager Philip Goldstein, best known for a landmark lawsuit that rolled back U.S. financial regulators’ rights to watch hedge funds more closely, is leading the charge.
"The secret is out. Hedge funds exist," said Goldstein, a former civil engineer who with a partner in 1992 founded Bulldog Investors, which manages about $500 million. "It is absurd to treat this like classified information," he said.
But lawyers and managers also worry their push for more openness might fall on deaf ears now that many hedge funds are suffering losses and weaker financial markets are being blamed for slow growth plus job losses.
"Hedge funds are always in the bull’s eye with the Securities and Exchange Commission and the climate is just so unsettled that I can’t imagine any standards being relaxed now," said Perrie Weiner, a partner and international co-chair of law firm DLA Piper’s securities litigation practice.
