Tony Blair offers stirring defense of 'misunderstood' hedge funds

By Rob Copeland

Fri Feb 1, 2013

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Former U.K. Prime Minister adds that ever-rising fees "have ended."


Festivities on the second night of the AlphaMetrix Miami 2013 Summit.

MIAMI -- The hedge fund industry found an unexpected champion Thursday at the AlphaMetrix Miami 2013 Summit, as former U.K. Prime Minister Tony Blair delivered a rallying cry heard 'round the Fontainebleau Resort's lavish "Glimmer" Ballroom.

"Some of the criticisms that are leveled on hedge funds and private equity are based on a complete misunderstanding of what they do and their impact on the economy," Blair pronounced.

Sounding sometimes as much a hedge fund PM as a political one, Blair struck a note that would have been welcome by the MFA or any other industry lobbying group. What are hedge funds? "They are just new ways of helping people get access to capital," he said.

"We want a financial sector that's capable at the margins of doing different things, as these alternative investments do," Blair added.

A standing room only crowd--visibly more packed than one night earlier when former Florida Gov. Jeb Bush had the stage--sat in rapture as Blair tried a bit of advocacy on the cost of investing in alternatives. "Those days that people would pay their fees and they would go upward..." he said, trailing off into studied silence. "Those days have ended."

Not a soul rose early for first dibs at the make-your-own Caesar salad, wild mushroom arancini or split lobster tails waiting at the seaside buffet.

"I'm a politician; I have no problem talking about things of which I know nothing about," Blair grinned when asked for his take on financial markets. "Government's role is to enable business to prosper. Not to oppose it," he opined. "When banks get into a defensive posture or crouch, that's not going to help the economy."

Despite his self-deprecation, Blair does offer an inside view of major banks--more than a few of which sponsored poolside cabanas at the conference. After leaving office, Blair served as an advisor for J.P. Morgan Chase, which was a "premier" sponsor of the event. The Telegraph reported last month that in retirement Blair has amassed a small trading operation in London and has built a personal fortune of perhaps $90 million.

That's enough to get him a coveted green lanyard at this Miami summit, a designation that all accredited investors wear around their necks as a badge of honor or, for many hedge fund marketers here, a target.

After the speech, the more than one thousand attendees funneled into LIV, by one measure the world's No. 2 night club, to toast their success with an open bar and private performance from Blues Traveler.

As trendy Miami-ites waited outside for the general public to be let in at midnight, Blues Traveler lead singer John Popper riffed on his hosts.

"AlphaMetrix...that sounds like a vitamin supplement," he said as the drummer played a rim shot.

A few swigs from his drink later, he took aim once again. "What the hell is AlphaMetrix? It's some kind of interaction thing?" he asked no one in particular. "You know, the Freemasons are a connection of people."

He considered the bi-level venue for a moment, gazing up at the pink fluorescent orbs hanging from the ceiling and suited-up crowd in front.

"Well if the Freemasons rock-n-roll, then AlphaMetrix is rock-n-roll."