With merger mania, can short ever be sweet?

For most long/short hedge fund managers, running a short book remains the real challenge in their role, where the risk is significantly higher and potential gain limited - the inverse of the situation in a fund's long book.

In recent times the short book has become an even bigger headache for hedge fund managers, says Mike Nicol, portfolio manager of Glasgow Mackintosh's Pan European Long/Short Equity Fund.

private problems

The problem, he says, has come with private equity funds: where once ma