CorpWatch – BlackRock, Marshall Wace, and Two Sigma Investments – three major hedge funds – have been conducting regular private surveys of brokers for wealthy clients. The practice – often called “alpha capture” – has raised red flags because of recent insider trading scandals at Goldman Sachs as well as information allegedly handed out by Morgan Stanley analysts during the Facebook stock market flotation.
Hedge funds are part of the $2.13 trillion global “alternative investment industry” which invests the assets of wealthy individuals and institutional investors, outside the scrutiny of normal regulation, in the hope of generating outsize profits.
