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To: TFF who wrote (11319)	8/3/2004 8:57:05 PM
From: TFF	Respond to of 12617

Hedge fund assets up 34% in 2003 By Alistair Barr, CBS MarketWatch.com SAN FRANCISCO (CBS.MW) - Global hedge fund assets grew by just over a third in 2003 as managers boosted returns and investors piled more money into the industry. Assets grew 34 percent to $795 billion while the number of funds climbed to 7,000 from 5,700, according the 10th annual hedge fund survey by consultant Hennessee Group LLC. Hedge funds are unregulated investment pools originally designed for the wealthy. They use strategies, such as short sales, which mutual funds are restricted from using. The Securities & Exchange Commission is considering regulating hedge funds for the first time because of concerns the industry is becoming too influential in markets. The survey "dispels common misconceptions that hedge funds have a greater impact on the broader market than mutual funds or institutional long-only funds," said Charles Gradante, managing principal of Hennessee, in a statement. Hedge funds still account for less than 2 percent of global financial markets, Gradante added. But because they can borrow extensively, their influence on the markets can be magnified. Gradante said 85 percent of the funds surveyed have never exceeded a leverage ratio of more than 2-to-1. Almost half of the 144 hedge-fund companies Hennessee surveyed said they were already registered as investment advisers, the main requirement of proposed SEC oversight of the industry. Fifty-eight percent have registered with the National Association of Securities Dealers, the SEC or the Commodity Futures Trading Commission, the consultant found. Among other findings, Hennessee said that hedge funds have more short positions than at any time since 1999, reflecting concern that equity markets may have gained too much in 2003. Pension funds continue to pour money into the industry, with $72 billion now invested directly, up more than four-fold since 1997, Hennessee said. Alistair Barr is a reporter for CBS.MarketWatch.com in San Francisco.