As an investment strategy, making private equity and hedge fund managers rich is a probable loser. As a tax policy, it is a guaranteed one.
The Great Debate UK
Hedge funds watching China's markets are licking their lips at what they see as the best shorting opportunity since Enron. But while plans to allow short-selling are imminent, this won't be a bear's picnic. Beijing's plans to allow two-way equity bets will give foreigners little chance. Borrowing individual stocks will be tricky, even for locals.
Only foolhardy parents would allow their children to reveal just the grades on their report cards they were happy with. Yet hedge funds are given this luxury in reporting their performance to compilers of sector-wide performance indices. The result is that while a single fund's track record is clear enough, hedge fund index returns still flatter the average fund. Investors would be smart to call for a clean-up.
from Funds Hub:
Guest blogger Robert Olman is President of Alpha Search Advisory Partners.
The views expressed here are the author's own and do not constitute Reuters point of view.
- Laurence Copeland is a professor of finance at Cardiff University Business School and a co-author of “Verdict on the Crash” published by the Institute of Economic Affairs. The opinions expressed are his own. -