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When Is A Hedge Fund Not A Hedge Fund

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by Felix Salmon
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Jun 09 2008 12:00am EDT

When is a Hedge Fund Not a Hedge Fund?

Dane Hamilton is a stickler when it comes to what is and what isn't a hedge fund:

Some funds that call themselves hedge funds really aren't, because they don't sell short, use leverage or buy derivatives, but are basically long-only funds with lucrative hedge fund fee structures aimed at wealthy investors.

Sounds a hell of a lot like a long-only hedge fund to me. But now I feel almost sorry for all those poor HNWIs who've invested their millions in a so-called "hedge fund" only to discover that it isn't, because it hasn't been levering up its CDOs of CDSs. They're going to feel dreadful when they find out.

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