Joining forces in the silly season

Oh happy days ' the silly season has thrown up the least likely pairing in the editorial world. The US's mighty Forbes magazine and the UK's most powerful tabloid, The Sun, have shown a united front and the subject that has brought them together? Hedge funds.

Of the two pieces, The Sun's manages to be the least daft, with Ian King explaining pithily how shorting works and how a Sun reader could invest £10,000 and lose some or all of it. Forbes runs with a much wilder line: 'These days you don't have to be rich and famous to make a bad investment in a hedge fund,' it claims.

Both pieces grudgingly admit that hedge funds can produce above-average investment returns. Forbes quotes Pinnacle Equity's 456% return last year and The Sun explains that hedge funds' obvious attractions lie in returns of up to 20% a year.

But the gist of both pieces is that unregulated super sophisticated hedge funds are unsuitable investments for smaller investors. Well, this is a bandwagon that Hedge Funds Review is happy to jump aboard.

Putting aside the hysteria, for the moment we don't think unregulated hedge funds are suitable for smaller retail investors in the UK either. The majority of hedge funds aren't exactly touting for that type of business anyway, so, having covered the subject, we now recommend that Forbes and The Sun consider the matter closed and return to the unit trust and mutual fund market with which they are more comfortable.

On a different note, I am very pleased to welcome a new market columnist to Hedge Funds Review, Laurie Pinto of Dresdner Kleinwort Wasserstein. Laurie will be writing a monthly column on what's hot or not so hot in the markets. Finally, in the diary section below you will see that Hedge Funds Review is launching an informal quarterly hedge funds' club. The idea behind this is to offer readers a chance to meet in an informal way and talk about the business ' or not. All conversations will be, of course, strictly off the record.

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