January 04, 2007
Whose Money Is It Anyway?
Let me be honest here. I’ve always liked the idea of hedge funds – investing a truckload of money in the hope of getting multiple truckloads back. That’s what I call being rich. Only problem is… it’s a bit difficult to determine who actually gets rich. Is it the investors or their hedge fund managers? While I’d like to believe that both parties profit from this arrangement, the truth lies elsewhere.
Hedge funds are popular not only for the huge sums of money they make. They have been known to be extremely good spenders as well. That is to say hedge fund managers know how to show the money they earn. Rather too well, if you ask me.
Now, they seem to have found a way to curb the excessive spending. The latest in-thing for hedge fund managers are "hedge fund hotels". These posh plug-and-play suites are situated in posh places like Boston's financial district, or downtown London. In Singapore, these suites are even said to come complete with executive secretaries! There's a problem, though: banks back these luxury suites.
This means the hotels are often used as enticements to get hedge fund managers to invest in these banks. This means our ‘hard working’ hedge fund managers are using shareholder money to pad their heavy bottoms in luxurious suites. That’s not to say all hedge funds are in the same boat as these greedy few. But still it makes one wonder if regulation is not a bad thing after all. Regulation will make these guys accountable for every penny they spend, so they’ll think twice before stepping into that ultra-luxurious suite. What sezs?
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