By Neil Wilson
In this new age of austerity, public debate in the UK and other major economies continues to be inflamed by uproar over the perceived scandal of bankers’ bonuses. Rightly or wrongly, the public perception seems increasingly clear that the banks have been free-riding on either explicit or implicit taxpayer guarantees. And this has been piling the pressure on politicians to “do something” about it.
But where does all this public furore and desire for retribution leave hedge funds? In the short term, it leaves them in an awkward place, it seems to me – damned in the public mind with guilt by association and their perceived proximity to the banks. After all, hedge funds do work very closely with banks – who provide key finance and operational support, plus trading ideas.
As many in the industry have argued forcefully since 2008 (ourselves included), unlike the banks the hedge funds...