Hedge Fund Article From 1968 Looks Like A Million Others I've Read Lately

Posted by Percy Walker at Tuesday, August 14. 2007 and is filed under Carried Interest,Hedge Funds

From New York magazine (October 21, 1968, p. 22, middle column):

[Hedge fund managers] are deeply worried about attracting any further attention in Washington: the SEC is already taking a long, careful look at the hedge fund phenomenon.  An even tougher problem is the fact that the Internal Revenue Service could change the provision in the tax laws that makes a hedge fund manager’s 20 percent fee taxable at capital gains rates.

I feel like I've read this paragraph a million times over the past year, but it was written almost 40 YEARS AGO!

I've explained many, many times why we need no additional regulation of hedge funds and no change in the tax treatment of carried interest, but this old article drives home the fact that light regulation of hedge funds and capital gains treatment of carried interest have been with us for many, many decades.  Why tamper with something so time-tested?

 
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  • Wednesday, August 15. 2007 David Boyd wrote:
    Care to comment on Easterbrook's assertion that "a Chicago econometrics firm, reports that in 2006, average return of the hedge-funds sector fees was 13 percent after fees were subtracted. In 2006, Standard & Poor's index funds, a benchmark class of investment available to anyone, returned an average of 14 percent after fees. Last year, Bridgewater Associates, a hedge fund that manages $30 billion, returned a net of 4 percent after fees: Bridgewater's clients would have been better off buying Mallo Cup coins."

    Easterbrook goes on to say, "Why do the rich put their money into hedge funds? The romance of exclusivity seems to be the key."

    Surely not. It's all scientific. Right?
  • Wednesday, August 15. 2007 Percy Walker wrote:
    ESPN's Gregg Easterbrook is what we in the business like to call a "Tuesday Morning Quarterback." Typical genius of hindsight stuff. I may have to respond with a full blog post.
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