Vol. 91, No. 4
Fourth Quarter 2006
Preface - Hedge Funds: Creators of Risk?
Gerald P. Dwyer Jr.
This preface provides an overview of the Atlanta Fed's 2006 Financial Markets Conference, "Hedge Funds: Creators of Risk?" held May 15-18.
Hedge Funds: An Industry in Its Adolescence
William K.H. Fung and David A. Hsieh
The business model presented in this article explains hedge funds' need for secrecy and their strategy risk and provides a framework to help investors, intermediaries, and regulators identify hedge funds' inherent systemic risk factors.
Hedge Funds and Investor Protection Regulation
Franklin R. Edwards
Increasing regulatory protection for hedge fund investors may ultimately prove too costly, and the author recommends that hedge fund investment strategies be made more, not less, accessible to a broader spectrum of investors.
Do Hedge Funds Increase Systemic Risk?
Nicholas Chan, Mila Getmansky, Shane M. Haas, and Andrew W. Lo
Hedge funds' investment strategies entail dynamic risks that could significantly affect systemic risk. The authors propose some new risk measures that gauge hedge funds' risk-and-return profiles at both the individual-fund and aggregate-industry levels.
Corporate Governance and Hedge Fund Management
Bruce N. Lehmann
The article provides a theoretical framework for thinking about the governance issues for hedge funds, which, the author argues, are much like those for limited partnerships or public firms with similar assets or liabilities.