Why hedge funds aren't 'greedy hucksters'

Hedge funds - at Moneyweek.co.uk - the best of the week's international financial media.

We last cited Consulta fund manager Matthew Ridley on the topic of hedge funds back in August 2004. It is time for some more name-dropping. Back in 2004 and to a lesser extent since, the existence of a supposed 'gold rush' into hedge funds has been the topic of fervid debate by the financial media. This time round, the spin is around apparent financial crisis.

There are, evidently, only two ways of covering hedge funds for most financial journalists. The first is to portray hedge fund managers as greedy hucksters smashing through a temporary regulatory 'window' to conduct their nefarious empire-building and busily stabbing traditional fund managers and the CEOs and shareholders of otherwise pristine companies with the shards. The second is to portray hedge fund managers as greedy hucksters cloned from the founders of Long Term Capital and plotting, by way of their own incompetence, to send the world financial system - and everyone's pensions - spiralling into oblivion. Both approaches seem to go down well with editors. On the 'gold rush' charge, Matthew Ridley made the following comments:

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