Mallaby shows hedge funds that the best defense is a good offence
| Apr 14th, 2008 | Filed under: Academic Research, Hedge Fund Industry Trends, Hedge Fund Regulation | By: Alpha Male |
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Hot on the heels of last week’s spirited defense of hedge funds by the Alternative Investment Management Association (see related posting), a leading commentator has also weighed in on popular misconceptions about hedge funds. His analysis is generating a lot of buzz not because it contains some new and controversial research, but because his is one of the few pro-hedge fund voices in the non-hedge fund media.
You may remember the name Sebastian Mallaby of the Council on Foreign Relations. In December 2006 he wrote an excellent article for the journal Foreign Affairs (see related posting) in which he made the following observation:
“Imagine two successful companies. Both are staffed by very smart people; both are innovative; both have an impact far beyond their industry, improving the productivity of the capitalist system as a whole. But the first, based near San Francisco, is the subject of adoring newspaper profiles, whereas the second, based in the New York area, is usually vilified. Actually, you do not have to imagine any of this, because it describes a double standard that already exists. The first company in the story is a technology firm; the second is a hedge fund.”
Since then, Mallaby hasn’t lost any of his sense of irony with regard to the way society and the media view hedge funds. In a January 28, 2008 op-ed for the Washington Post, Mallaby contrasts hedge funds with investment banks, writing:
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