BGI CEO tells FT about “artificial distinction” between hedge and long-only

By: Deborah Brewster, Financial Times
Published: November 9, 2006

Blake Grossman, CEO of BGI, articulates a point that is central to alpha-centric investing: that the terms “alpha” and “beta” are not synonymous with “hedge” and “long-only”.  Says FT:

“The head of Barclays Global Investors, the world’s biggest money manager, has said the distinction between hedge funds and the mainstream asset management business has become increasingly ‘arbitrary’ as the two industries converge.

“Blake Grossman, chief executive of BGI, told the Financial Times in a rare interview: ‘The notion that there is a traditional way of investing that is long only, and then there is hedge funds, is crazy. We’re seeing real convergence. We’re getting mandates to employ some degree of short-selling, some degree of derivatives . . . If you look out five years, there will be much less of a divide between what’s considered a hedge fund and what’s considered a traditional strategy.'”

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