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12 Nov 2008

New European Hedge Fund Association Launch Underway

Preparations are underway for the creation of a new European hedge fund association,, which has the objective to communicate the public utility of this industry for wealth creation and risk management. A first meeting for founding participants will take place this Friday, November 14, in Paris.

Rene Friedrich, 45, who has analyzed and selected hedge funds since 1996, is launching the initiative, as he sees the industry's advantages undervalued, "There a many opinions about the risks of hedge funds and about the wealth created for their managers, but one sees rarely a balanced view of the general public utility of better asset management in general and of hedge fund work in particular. The realness of the benefits only seems to become apparent when the opposite occurs and wealth is lost in financial markets. The fact is that effective asset management contributes wealth to the economy."

"The initiative aims to give the hedge fund industry a more just image: While individual hedge funds can have more risks than other investment products and investors may lose all or part of their invested capital, the industry overall has, so far this year, avoided the degree of wealth loss of equity investments in general. And a notable number of funds even has avoided losses altogether, no small achievement. It can be argued that future regulations, which could facilitate a greater diversification into hedge funds and funds of hedge funds, may ultimately help to reduce the sum of wealth destructions in cyclical downturns."

"Asset management is not a zero sum game, financial investments are the source of capital in projects, and any wealth created, or not lost, is added, or maintained, in the economy. These are basic principles, and for all the criticisms of financial markets, some just and some not, the objective must be to use what is helping," Friedrich concluded.

1 comment:

Anonymous said...

Too bad this effort is just getting started: in the USA this week Congress is calling 5 top fund executives to testify, presumably to scapegoat them. For the industry, it's a good opportunity to say its piece. A great example of proactive defense from the industry in the UK is this open letter ("Hedge Fund Community Albourne Village Rejects Blame"):