Hedgestock: A Festival of Peace, Love and Greed



Brian Cady brianinatlanta2001 at yahoo.com
Thu Apr 6 08:25:15 CDT 2006


http://msnbc.msn.com/id/12133954/
(and see paragraph five below for the on-topic)

Hedge Funds' Summer of Love
Shaking off its buttoned-down image, the hedge fund
industry is throwing a party.
By Rich Duprey
Motley Fool

Were The Motley Fool not a family-oriented financial
website, I might have classified this under something
stronger than the "What the heck?" category. Hedge
funds, those sinister financial creations of the
uber-rich, have apparently decided that stodgy,
straight-laced confabs are sooo last century. No
longer satisfied with the mystery of backroom deals
and shadowy billionaire financiers, the industry is
apparently ready to remake itself as a rollicking road
show, complete with a charity concert from aging
rockers, a counterculture mentality (perhaps not
unwarranted), and an opportunity to network with
industry luminaries. 

"Hedgestock 2006" is the hedge fund industry's answer
to the "Predator's Ball" that junk-bond king Drexel
Burnham used to throw to woo corporate takeover
artists like Michael Milken in the 1980s. The event
will be held on the pastoral estate of the Knebworth
House in England, and its sponsor hopes to make it the
premier hedge-fund-industry trade show of Europe. The
grounds have been the site of many rock concerts over
the years, featuring groups like the Rolling Stones,
Led Zeppelin, Queen, and more. While there will be
many acts performing this year (though I'm not quite
sure what a "hedge-fund-related band" is) Hedgestock's
party should fit right in. It's just that the
white-shoe types at Merrill Lynch(NYSE: MER), Goldman
Sachs(NYSE: GS), and Lehman Brothers(NYSE: LEH), who
are listed as Founding Sponsors, might look out of
place wearing "love beads" and flashing a peace sign. 

Hedge funds are similar to mutual funds, in that
investors pool their money together to have it
professional managed. But the similarities end there.
Whereas mutual funds are heavily regulated,
particularly in the types of investments they can
make, hedge funds are virtually unregulated. They can
go long and short on stocks (mutual funds generally
can't go short), and use leverage, derivatives, and
other sophisticated strategies to generate high
returns for their investors. While the original
purpose of a hedge fund was to "hedge" against the
risk of a bear market, they've since expanded far
beyond that scope. 

Oh, and you'll need a lot of cash if you want to
participate. Regular Joes and Janes need not apply;
generally, you have to earn more than $200,000 a year
and have a net worth in excess of $1 million. I'd have
to dig around under my sofa cushions for quite a while
to meet those standards. 

Now, in addition to being exceptionally wealthy, hedge
fund investors have access to tony English-countryside
estates, aging rockers (Roger Daltrey of The Who will
be headlining this year's Hedgestock), and charity
balls. (The event's net proceeds are apparently
earmarked to a charity for teenage cancer patients.)
While channeling the feel-good, free love memories of
a 1960's icon sounds like a grand time, hedge funds
and hippies seem just a bit incompatible,
philosophically. 

Then again, who knows? Maybe 2006 will be a Summer of
Love for hedge funds.


-Brian in Atlanta
The Who This Month!
http://www.thewhothismonth.com

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