Questions for Hedge Funds' Future

Chris Addy, the Montreal-based principal of hedge fund due diligence consultants Castle Hall Alternatives, decides that the coincidence of Halloween and Global Financial Catastrophe is a good time to rattle some of the skeletons in the hedge fund closet. His ‘Hedge Fund Investing in a New World’ is a brief monograph that manages to kick over several large gravestones by positing answers to five simple questions.

Is 2 and 20 fundamentally flawed?

Do hedge funds need better corporate governance? 

Is there an ‘expectations gap' in the administration industry?

Is the prospectus written for the manager or the investor?

Is it possible to hold illiquid assets in an open ended vehicle?

Going forward, the current crisis may well lead to a recognition that the structures and conventions accepted in the past may not be the best for the industry. The New World will require new choices and the hedge fund industry will impede its success if it does not adapt and learn from the lessons of today’s markets. Ultimately, challenge brings opportunity: we remain convinced that a better, stronger hedge fund industry can emerge from the difficulties of today’s markets.

Get on it.

Hedge Fund Investing in a New World

by Chris Addy

Castle Hall Alternatives Oct. 31 2008