News: Success of hedge funds not enough to ward off critics.

Pensions Week, April, 2008

Byline: Tom Willetts

Hedge funds are facing a wave of criticism despite many delivering absolute returns during extreme volatility, according to the Alternative Investment Management Association (AIMA).

Critics singled out hedge funds last month when HBOS became the victim of false rumours that it had been forced to seek emergency funding from the Bank of England. It was subsequently targeted by short-sellers.

Florence Lombard, AIMA's chief executive, said it was vital that the legitimate shorting of assets was not confused with alleged market abuse by unidentified players in the market.

"Hedge funds are now considered part of the mainstream of the asset management industry," she said. "They have preserved capital over the past 12...

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