Hedge funds still misunderstood

Hedge funds are too often being portrayed as either heroes or as villains, according to the vice chairman of leading Mellon-linked EACM Advisors, Robert Jaeger.

Jaegar told the Conference of Major Superannuation Funds on the Gold Coast that there was a need to do away with many of the misconceptions surrounding hedge funds.

He said that it was ironic that hedge funds were often seen as being “secretive and unregulated”.

“The fact is, they are secretive precisely because of the way they are regulated,” Jaeger said. “Certainly, in the case of the US, there are very strong regulations which prevent hedge funds from presenting themselves as asset managers.

“And while hedge funds may be exempt from certain types of regulation, they are still totally covered by all the other regulations with respect to use of leverage, fraud and insider trading,” he said.

Jaeger said that while in Australia there was a little more freedom with respect to hedge funds presenting themselves to the public, there were still cautions and caveats, with the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority having developed various checklists and requirements for hedge funds.