Belleville News-Democrat – Hedge-fund managers sit in the investment world’s sweet spot, though it may be getting late in the game.
Successful hedge-fund managers can earn untold riches employing investment strategies that range from buying common shares and influencing public companies’ strategies to delving into the arcana of derivatives and the distressed debt market.
Many enjoy a compensation structure that calls for investors to hand over a management fee equal to 2 percent of assets plus 20 percent of investment profits. And if the returns outpace more traditional investments, those forking over the fees will not complain.
On top of all that, regulators are falling over each other this week to sing the praises of these private pools of investment capital. There is a unanimous call for hands off any further regulation. At a Senate Banking subcommittee hearing Tuesday and elsewhere, there was homage by regulators and others to the public virtues of hedge funds.
There is no desire for more regulation at the Treasury, Federal Reserve or at the Securities and Exchange Commission, though some wrongly insist the SEC’s mandatory hedge-fund adviser-registration rule is in itself overly oppressive regulation.
The upshot is hedge-fund managers can make lots of money without the distracting fanfare attendant to public-company chief executive compensation and receive hosannas, too.
