The dominant players in the rapidly growing hedge fund industry will be on opposite ends of the industrys spectrum, Donald H. Putnam, chief executive of
Speaking on a number of issues concerning hedge funds, Putnam cautioned regulators that more rules governing the products could have the unintended consequence of curbing growth of a product that has proven its rightful place in investors portfolios, particularly during this bear market. "Alternatives can and should mitigate negative returns and improve portfolio risk-adjusted returns," he said. "Hedge fund demand from institutional and high-net-worth investors has exploded during the bear market."
Hedge funds need to adopt practices to instill accountability and transparency. "High-profile failures and lack of transparency will inflame critics and worry investors. Regulators need to craft rules while tuning out demands for hasty conclusions," he said.
In a report last year, Putnam Lovell and
