Investing May 14, 2004

Well-Known Author Doubts Hedge Fund Info

May 14, 2004 (PLANSPONSOR.com) - A well-known markets watcher and Princeton University economist is raising new doubts about most hedge fund performance data, although it isn't yet clear why he is raising questions.
Reported by

Burton Malkiel, author of the acclaimed, “A Random Walk Down Wall Street,” said the hedge fund data as currently reported by major hedge fund tracking indices is “tainted and misleading,” according to a Hedgeco.net report.

Malkiel charged that there is considerably bias built into such data. “There does seem to be a substantial amount of bias in the reported figures, one ought to look at these kinds of numbers with a grain of salt,” asserted Malkiel, also a long-time member of The Vanguard Group Board of Directors.

While it is uncertain how Malkiel arrived at such a conclusion, he is gearing up for the release of his new study, which examined the data collection and reporting strategies utilized by major hedge fund data trackers in compiling such data.

While hedge fund industry data continues to evolve, partly due to growing investor interest worldwide, keeping pace with such data has increasingly become more challenging. Today most hedge fund tracking firms report global hedge fund assets between $750 billion to about $822 billion.

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