Rating agencies have taken a lot of heat for their failures to warn investors about both the Enron and the mortgage-backed securities crises. Just two years ago, the agencies started rating hedge funds. Will they be any better at catching the funds' problems before it's too late?
Some of the recent moves don't inspire confidence. Ospraie's now-defunct flagship fund got a "pass" operational rating from Amber Partners until it announced it was liquidating, and Amber Capital Management's troubled hedge fund, which has frozen redemptions, still gets a passing grade. (The two Ambers aren't related.)
But other rating agencies are