Hedgestock 2006 - What the Papers Say

What the Papers Say

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"Hedge Funds Favor Garden Party Over Brash Event" by Adam Bradbery of DOW JONES NEWSWIRES
Reproduced by kind permission of Dow Jones Newswires

Reputed to be the highest earners in the financial world, hedge fund traders present a very different image from their predecessors in the top slot. Nowhere is this more evident than in the nature of their industry gatherings. In the 1980s, the wheelers and dealers of the investment banking world were famous for their brash, alcohol-fuelled excesses. Twenty years on, Albourne Partners Ltd. is hoping to attract the financial markets' top moneymakers to an event that resembles an English village fete. Taking its name from iconic 1960s music festival Woodstock, the Hedgestock conference will be held in June in Hertfordshire, southern England.

The village-themed event highlights the dispersed nature of the hedge fund world, which craves a sense of community while usually shunning garish displays of personal wealth. "Hedge fund managers tend to be very private people and there's no regular meeting place, so a lot of the interaction tends to be done on the fly," said Len Gayler, the owner of hedge fund Cayenne Asset Management Ltd., which is supporting the event.

The format will be informal, meetings will be held in a tented "village" in the grounds of English stately home Knebworth House, and the whole event will round off with a charity rock concert. It's a far cry from annual Predators' Ball of 1980s New York, a brash celebration of wealth that encapsulated the ethos of high-earning "master of the universe" traders. Now hedge fund traders are some of the financial sector's highest earners. They have the opportunity to make more money than their counterparts in banks because they tend to get a percentage of their own profits rather than a share of the desk's returns.

Hedgestock's reference to a festival that celebrated antiestablishment ideals is also deliberate, given that many hedge fund traders have eschewed the formal world of investment banking for a more relaxed working lifestyle. "Most hedge fund traders have worked for the big banks and there is a camaraderie which derives from the feeling they are all refugees who have escaped from that environment," said Simon Ruddick, managing director of Albourne Partners. The village community theme isn't new for Albourne. While the company was set up to offer an advisory service for investors in hedge funds, it also runs an Internet discussion forum and information network designed along the lines of a cyber-village.

The site, which accommodates close to 30,000 "residents," including investors, fund managers, prime brokers and other service providers, has a pub for industry chat, a nursery for information on start-ups, a library for industry articles and a hedge fund mall to showcase fund offerings. "We chose the village and countryside theme because the traditional view of the financial world is of the City," said Ruddick. "And the city often takes itself a little too seriously."

Existing hedge fund conferences can rely on speeches and have too little interaction between managers and investors, says Ruddick. Hedgestock will still have keynote speeches and panel discussions, but a central focus will be on less formal meetings. A clearing service will match up interested parties.

Albourne has grand plans for its event. "We would love this to be the trade fair for the industry in Europe," said Ruddick. "And that needs the buy-in of the industry, which we think we can achieve because that's our client base." Albourne already has the backing of 10 prime brokerage banks and the involvement of large investors such as the Ontario Teachers' Pension Plan (OTP.YY) and London-based Hermes Pension Management Ltd. in the panels. The company has received over 500 inquiries from other firms about participating.

"We hope to start a chain reaction," said Ruddick. "Top investors like hanging out with other top investors, while the funds will feel happy if the investors are there and the prime brokers will be happy if the funds are there."

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