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Non-Tech : Derivatives: Darth Vader's Revenge -- Ignore unavailable to you. Want to Upgrade?

To: Tom who wrote (286)	10/1/1998 5:12:00 PM
From: Worswick	Read Replies (3) \| Respond to of 2794

Tom hello today...my opinion of the European Union is that in a world of emergent trading blocks the European Union will have to come about and England will have to join. Will it work? Yes, I think so if only because the rest of the world will move ahead and Europe will also have to move ahead. But can you imagine bureacrats in the center of Europe making the fiscal policy for Sicily? At that after having spent the summer in Europe it is such a hassle getting money changed at each border. Every bank in Europe with an exchange counter should be against union. An interesting article today inteh NY Times on hedge funds: (C) NY Times For Private Use Only By REED ABELSON new report on hedge funds, the private investment funds aimed at wealthy individuals and institutions, shows that they have soared in popularity this decade. The report by Cerulli Associates, a Boston consulting and research firm, also highlights the growing interest in these funds by institutional investors and offers some insight into the characteristics of these highly secretive funds. The report is expected to be released next week. While hard and fast numbers are impossible to come by, Cerulli estimates that total assets under the hedge funds' management, referred to as investors' capital, have increased roughly sixfold since 1990 to some $300 billion at the end of 1997. The figures do not reflect borrowing by the funds, which significantly increases the amount they can invest and the impact that they have on markets. About half of the money invested is from foreign investors, using off-shore funds. The number of funds has more than doubled to roughly 4,500. Despite the recent debacle involving Long-Term Capital Management, Cerulli believes investors will continue to clamor to put their money in hedge funds and estimates that assets will continue to climb by at least 15 percent annually over the next 5 to 10 years. "I still believe the industry is very alive and positioned for growth," said Jeff Benjamin, a consultant with Cerulli who was the lead author of the report. Once the domain of wealthy investors, hedge funds are now attracting pension funds, endowments, foundations and investment managers who invest in a group of hedge funds. These institutions, which accounted for only 5 percent of the hedge funds' assets five years ago, now account for about 80 percent of assets. The involvement of such big institutions should help push hedge funds, which frequently refuse to let their investors know exactly what they are doing, to disclose more about their strategies and what they own. On the basis of a data base of about 1,100 funds, Cerulli also offers a glimpse into the makeup of these funds. While George Soros and Julian H. Robertson Jr. get the lion's share of attention, most of the funds are much smaller entities. About a quarter of them have assets of less than $10 million, and only about 5 percent have assets of more than $500 million. "They operate like little entrepreneurs, in one- to two-person offices," Benjamin said. While Cerulli did not examine the strategies of these funds in any detail, the report does show that about 81 percent of the funds use borrowings to leverage their returns. Benjamin estimates that the majority of funds do not use the level of leverage that Long-Term Capital employed, which is said to be as high as 100 to 1, but typically keep their borrowings to less than five times their assets.