As if hedge funds didn’t have enough to cope with last month. Not only did ASIC pull their raison d’etre from under their feet, they copped a rather entertaining shellacking from Rogerscasey’s Tim Barron at the Conexus Financial Absolute Returns Conference.
The boss of the US consultancy, which InTech uses for global manager research, is annoyed by many things about hedge funds but most of all, it seems, by their names. “Call me old-fashioned but I sort of like the simple old names, the ones that tell you something about the organisation,” Barron said. “You know, Hotchkiss & Wiley – they’re the names of the founders. Analytic – that describes the firm’s activity. Goldman Sachs Asset Management incorporates the parent brand, Philadelphia International informs you the group is from Philadelphia. “Then you get these hedge fund names. Traxis, Farallon, Cerberus, Pequot. Respectively, these are a column support in the lumbar spine, radioactive islands, a three-headed mythological creature, and a Native American tribe that builds casinos.”
Barron was amused to learn later, from Kevin Gundle at the Aurum hedge fund-of-funds, that ‘Amaranth’ comes from the Greek for “flower that never dies”. Barron also lamented that hedge funds were “too easy to create”. He pointed out that in 1996, the Rogerscasey database contained 2392 hedge funds and 389 hedge fund-of-funds.
By 2006, there were 7211 of the general partners and 2221 of the guys grouping them together. “The monkeys are working away but you’re not getting Picasso or Rembrandt or Mozart,” Barron said. “You’re more likely to get paint-by-numbers and karaoke.”
This is a man who’s obviously never seen Steve Howell and his hedgie honchoes kicking out the jams as ‘Typhoon’ at the annual Hedge Funds Rock event – top level karaoke, even if some of the returns have been off-key these last few months.