Hedge Funds to the Rescue … You Expected Differently?

April 2, 2008 |

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It should come as no surprise that the likes of Blackrock and Highfields have stepped in to lend a hand to the stumbling sub-prime mortgage market. They’re hedge funds, that’s what they do.  Government and corporate interventions are slow and laden with bureaucratic red tape.  And when they try to move quickly, mistakes are made ($2 for Bear Stearns, sheesh!)  Even at the multi-billion dollar assets under management level, hedge funds remain nimble and poised to step into these types of situations.  Think about it, why do the best and the brightest leave their positions at the “blue chip” bulge bracket shops to start a hedge fund?  To leave behind the shackles and ignorance that put these large institutions into the predicament that they are currently in. 

Of course the press will jeer hedge funds for taking advantage of the situation.  But let’s be realistic, why are we investing in hedge funds to begin with?  TO MAKE MONEY.  And if we can help out the economy along the way, well, that’s sweet icing on the cake.  Not to get too far off topic, but this is why the regulation of hedge funds needs to remain at a minimum; to allow these folks to get it done when the chips are down. 

Three cheers for hedge funds.  Hip Hip Hooray!

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