hedgie?

Nobody seems to like hedge fund managers much, and the public seems to enjoy stories about their mishaps. Are they really as brash as the stereotype suggests?
Nobody seems to like hedge fund managers much. Is it simply because they make a lot of money? Is it envy? Jealousy? Or are they really as brash as the stereotype suggests? The past month has seen a rash of unflattering incidents involving hedgies. There was the London manager Bertrand de Pallieres, who was so busy shorting stocks that he didn't notice for three months that his £80,000 Maserati had been towed away. A New York hedgie, John Devaney, was treated with mockery, rather than sympathy, when a trading downturn forced him to put his helicopter and yacht up for sale . Then this week, the New York Post reported that a Manhattan hedge fund manager, Stuart Sugarman, had been assaulted in a case of "gym rage" for war-whooping too annoyingly during a spin class . Allegedly, Sugarman ignored pleas to stop shouting "you go, girl" and "great song!". He needed back surgery after a classmate hurled him at a wall, bike and all. A certain intensity seems to be necessary in people who make their living by going long or short. Ari Kiev, a psychiatrist whose book Hedge Fund Masters studies the industry's players, says they tend to have specific personality traits. "Clearly, you want someone that's goal directed, someone who's able to set targets. Someone who's disciplined, able to be patient and able to synthesize the work of others in order to get a variant view," he says. Brains simply aren't enough, according to Kiev: "There are a lot of very smart analysts who understand stocks but who don't really have the same appetite for risk, appetite for pain." A ruthless streak is possibly an advantage. A natural disaster, for example, is a buying opportunity - within days of the 2004 tsunami, for example, some global funds were exploring buying opportunities in Sri Lankan construction. Even in their own backyard, hedge funds aren't overwhelmingly popular. The leafy town of Greenwich, Connecticut is America's hedge fund capital with at least 380 funds managing $100bn. Greenwich's endless row of boutiques - Tiffany, Saks, Ralph Lauren and LaCoste to name a few - speaks volumes about the money being generated by the industry. But local people have certain reservations. Mary Ann Morrison, president of Greenwich's chamber of commerce, says funds don't show much interest in community affairs. "For over a century, Greenwich has been one of the most upscale places in the north-east. It's always attracted old money," she says. "Hedge funds are changing the make-up of the business community." Although individual fund managers are sometimes generous, the funds aren't into community activism: "They're occupying class 'A' business space but that doesn't mean they're getting involved in the way their predecessors did." There are, of course, exceptions. The social event of the year in Greenwich is the Bruce Museum's annual Renaissance Ball - which this year was themed on the "jewels of India". With 500 guests, the black-tie event raised as much as $800,000. In Britain, there is the annual Hedgestock music festival which donates all its proceeds (reportedly nearly £1m annually) to the Teenage Cancer Trust. Unlike most rock concerts, it has a Moet & Chandon champagne tent and is promoted, only half jokingly, as "a festival of networking". When asked about their poor public image, hedge fund managers tend to answer with a shrug. David Friedland, president of the US Hedge Fund Association, says: "If a hedge fund manager's been successful, good luck to them if they want to spend their money on a private jet." Criticism, he says, is water off a ducks back: "Although hedge funds are bad-mouthed and bashed by everybody, sophisticated investors, pension funds and high net worth individuals all use hedge funds very heavily." In an attempt to shed the industry's earnest demeanor, Andrew Baker, deputy chief chief executive of Britain's Alternative Investment Management Association, reaches for a musical comparison. Why, he asks, do the least responsible participants get the most attention? "If you were a country and western singer and I was always comparing you with a picture of Pete Doherty, eventually you'd get quite annoyed," says Baker. "Hedge funds are not all like Pete Doherty. Some are highly leveraged, some are not." It would be idiotic, of course, for anybody to be gleeful at a downturn in hedge funds' performance. The losers aren't always obvious - but they are plentiful. When Australia's Basis Capital declared one of its funds bankrupt this week, it was revealed that one of the investors with burnt fingers was a pension fund for teachers in the state of Victoria. Yet the scale of the rewards for success do inspire eye-rolling. According to Trader Monthly magazine, 93 of the world's 100 most successful financiers were hedge fund managers last year. Members of this elite earned an average of £120m and five of them took home more than £500m. Unions in America are becoming more inventive in tapping into popular discontent at such rewards - particularly when tax breaks accentuate financiers' riches. A demonstration was staged in the Hamptons this week by an apparently new organisation called SHAME - the Southampton Alliance for Monied Estates. Calling for sympathizers to rally around the KKR private equity boss Henry Kravis to console him for the market's downturn, SHAME claimed to represent "working families behind the buyouts" who were campaigning for more tax relief for billionaires. It was, of course, a spoof set up by the SEIU, a 1.9 million-strong union and ardent critic of the excessive spoils of financial tycoons.