Execs. Greet Hedge Funds With Open Arms

Feb 6 2009 | 1:17pm ET

The overwhelming majority of public companies are keen to engage with hedge fund investors, with 89% proactively meeting with hedge funds as part of their investor relations programs, according to a new survey.

Despite the widely reported concerns about short selling and hedge fund activism among some company CEOs, a Bank of New York Mellon survey reveals a broad acceptance of hedge funds as investors.

“Companies have realized that many hedge funds can be a viable source of long term investment," said Guy Gresham, New York head of the global investor relations advisory team in BNY Mellon's depositary receipts division.

The number of companies meeting with hedge funds is up significantly from 2006 (76%) and marginally from 2007 (88%). Companies in Europe and North America are most likely to meet with hedge funds. In Asia Pacific (75%) and Latin America (70%) the picture is mixed, with 15% of Asian companies stating they have not met with hedge funds in the past and are not considering doing so in the future.

Because hedge funds typically have a more flexible mandate and greater risk appetite than mutual funds and institutions, they are more likely to invest in distressed companies or those facing difficulties as a result of the credit crunch. “Our advice to companies is to be proactive with their investor relations programs in spite of the volatile markets,” said Gresham. “There is a lot of cash on the sidelines, and now is the time to catch the attention of these potential investors.”

However, the survey found some dissatisfaction among companies regarding the quality of the hedge funds they meet. Twenty seven percent said they did not know or lacked enough information to judge the quality of hedge fund managers they met through brokers. A further 21% said brokers introduced them to too many small funds or to aggressive high turnover funds.


In Depth

JOBS Act Propels Real-Estate Crowdfunding Platform

Oct 21 2014 | 2:57am ET

If D.J. Paul were a real estate development, he would be described as “multi-use...

Lifestyle

Strippers Accused Of Robbing Hedge-Fund Manager Face Jail

Oct 20 2014 | 9:20am ET

A group of alleged stripper-thieves—whose victims include a hedge-fund manager...

Guest Contributor

PAAMCO: European Equity Exposure - Challenging Year, But All is Not Lost

Oct 16 2014 | 4:12am ET

European equity hedge fund managers have had a tough time so far this year. The...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…

 

Futures Magazine

October 2014 Cover

Deeply flawed risk benchmark

Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.