Institutional Investor's Alpha Magazine - November 2008 - (Page 5)

Letter from the editor Not-So-Hot Seat EDITOR Michael Carroll EDITOR Michael Carroll EXECUTIVE EDITOR Michael Peltz MANAGING EDITOR David Schutt INTERNATIONAL EDITOR Tom Buerkle U.S. EDITOR Jeffrey Kutler EDITOR-AT-LARGE Firth Calhoun ART DIRECTOR Nathan Sinclair ART DIRECTOR Irene Ledwith ASSISTANT MANAGING EDITORS Tom Johnson ASSISTANT MANAGING EDITORS Lewis Knox (Research), William Loob (Editorial Production), (Research), Jeffrey(Director, ResearchTechnologyGroup), Sathya Rajavelu Kutler (Global Operations and Steve Rosenbush (Wall Street, Corporate Finance), Banking), Deborah F. McClellan (Editorial Tracy Tjaden (International) (Money ManageProduction), Barbara Rudolph BUREAU CHIEFS Loch Adamson (London), ment) Allen T. Cheng (Asia) EUROPEAN EDITOR Tom Buerkle (London) SENIOR EDITORS Steven Brull (Los Angeles), BUREAUCates, Jane B.Hamlin (Hong Kong) Karl CHIEF Kevin Kenney (Editorial Research), Jo Wrighton (Paris) SENIOR EDITORS Steven Brull (Los Angeles), SENIOR WRITERS Frances Denmark, Michael Shari Andrew Capon (London), Jane B. Kenney STAFF WRITERS David Lanchner (Paris), (Editorial Research) SENIOR WRITERS Deepak Gopinath, Justin SENIOR ASSOCIATE EDITOR Tucker Ewing ASSOCIATE EDITORS Sivert Hagen, STAFF WRITERS(Research Specialist), WeiQing Lu Julia Leikin Rich Blake, David Lanchner (Research Specialist), Carolynn B. Tetro (Paris) COPY CHIEF David Wray SENIOR ASSOCIATE EDITOR Tucker Ewing SENIOR CONTRIBUTING EDITORS Fran Hawthorne, ASSOCIATE EDITORS Emily Fleckner, Sivert CONTRIBUTING WRITERS Imogen Rose-Smith, Julie Segal Schack Harvey D. Shapiro, Stephen Taub Hagen Pam Abramowitz, Danielle David Wray COPY CHIEF Beurteaux, Phil Davis, Katie Gilbert, Udayan Gupta, Scott Martin, Neil O’Hara, Nick Rockel, Robert Rosenberg, Jaye Scholl, Hal Lux, Harvey D. Shapiro, Charles Smith Henry Scott Stokes (Tokyo), Stephen Deputy Copy Chief: COPY DEPARTMENTTaub, Joan Warner Bill Christophersen; CONTRIBUTING EDITORS Colin Barraclough, Copy Editors: Ingrid Accardi, Ruth Hamel Lucy Conger (Mexico City), Jonathan Kandell, ASSISTANT TO THE EDITOR Elizabeth Simroe Lois Madison Reamy, Kazuhiko Shimizu ART DEPARTMENT Deputy Art Director: Diana Panﬁl; (Beijing), Leah Nathans Spiro Associate Art Director: Anthony Scerri; COPY DEPARTMENT Deputy Copy Chief: Jeff CranSenior Designer: Jennifer Klock; Photo Editor: Katie Constans; mer Acting Associate Photo Editor: Frannie Ruch; ASSISTANT TO THE EDITOR Elizabeth Simroe Color Imaging Manager: John Miliczenko CHAIRMAN & CEO Deputy Mueller Patrizia ART DEPARTMENT Gary Art Director: GROUP PUBLISHER Christine Cavolina Associate Art Director: Stephanie Lora; Photo Editor: PUBLISHER Joy DeSanto Anastasia Pleasant; Color Imaging Manager: PUBLISHER, INTERNATIONAL Spencer Wicks John Miliczenko PUBLISHER, ASIA Wendy Gallagher ONLINE SALES DIRECTOR Chris DeAngelis PRESIDENT & CEO Christopher R. Brown EXECUTIVE DIRECTOR OF MARKETING SENIOR CONTRIBUTING EDITORS Fran Hawthorne, Bove; Louis Cassetta PUBLISHER Christine Cavolina PRODUCTION DIRECTOR Brian Gill PUBLISHER, INTERNATIONALRobert Tonchuk DIRECTOR OF FULFILLMENT Lisa Traeger CHIEF OPERATING OFFICER David E. Antin PRODUCTION DIRECTOR Brian Gill Institutional Investor’s AlphaTM and AlphaTM, 225 Park Avenue South, MANAGING 10003; (212) 224-3300; Fax: (212)PRODUCTS New York, NY DIRECTOR OF RESEARCH 224-3171. Denise Murrell © 2008 Institutional Investor, Inc. No statement in this magazine is to be construed as a recommendation to buy or sell securities. DIRECTOR OF FINANCE AND OPERATIONS Neither this publication nor any part of it may be reproduced or transmitted in any form or by any means, electronic or mechaniDavid E. Antin cal, including photocopying, recording or by any information storage and retrieval system, without the prior written permission Institutional Investor’s magazine. For reprints contact Dewey of Institutional InvestorAlpha TM and Alpha,TM 225 Park Avenue Palmieri (212) NY 10003; (212) 224-3300; Fax: (212) 224South, New York,224-3675; Fax: (212) 224-3563; e-mail: dpalmieri@institutionalinvestor.com. Subscription hotline: 3171. (800) 437-9997; Overseas: (44 -20) 7779 8999 FIREWORKS. THAT’S WHAT I WAS EXPECTING when I learned that the House Committee on Oversight and Government Reform would be holding a hearing in mid-November on the risks that hedge funds pose to the ﬁnancial system — dragging ﬁve of the world’s highest-paid managers before it to testify. After all, this was the same committee that earlier this fall had ripped into the managements of troubled insurance giant American International Group and failed investment bank Lehman Brothers for their “unbridled greed” and blatant refusal “to accept any blame for what happened to their companies.” It was also the same group that three years earlier had attacked professional baseball for its drug policies, grilling ﬁve of the sport’s biggest stars about their alleged use of steroids. This month’s hearing, however, turned out to be a major-league letdown. Committee chairman Henry Waxman, the California Democrat who had chastised the CEOs of AIG and Lehman for growing rich by taking on excessive risk, treated billionaires Phil Falcone, Ken Grifﬁn, John Paulson, Jim Simons and George Soros with uncharacteristic kid gloves. Yes, he asked each manager if the systemic risk posed by hedge funds justiﬁes greater federal regulation (only Grifﬁn said it doesn’t), but he left the potential hot-button topic of raising taxes on hedge funds to Connecticut Republican Christopher Shays and Democrat Elijah Cummings of Maryland, neither of whom pushed very hard. That was especially surprising, since the committee had chosen these ﬁve hedge fund honchos precisely because they had topped Alpha’s list of best-paid managers; each earned at least $1.5 billion in 2007. Behind the seeming good feelings was perhaps a certain sense of awe among some committee members of the managers in their midst. Part of the questioning focused on how their hedge funds had avoided — and in most cases proﬁted from — the ﬁnancial problems that have blindsided both Wall Street and Washington during the past 18 months. Several committee members even asked how they would manage the $700 billion Troubled Asset Relief Program and seemed particularly enamored of John Paulson’s suggestion that the government should get higher dividends and more warrants in return for future equity injections into ﬁnancial ﬁrms. “I was thinking that we probably had the wrong Paulson handing out the TARP monies here,” said Massachusetts Democrat John Tierney, “because I agree with you, in essence, about not getting the deal as taxpayers that we ought to be getting.” When it comes to regulatory hearings, hedge funds would be hard-pressed to get a better deal. MICHAEL PELTZ EXECUTIVE EDITOR mpeltz@iimagazine.com NOVEMBER 2008 • INSTITUTIONAL INVESTOR’S ALPHA • 5

Table of Contents Feed for the Digital Edition of Institutional Investor's Alpha Magazine - November 2008

Institutional Investor's Alpha Magazine - November 2008 Contents Letter from the Editor Longs & Shorts Pension Corner: Risk Rewarded The Good Guys: In the Here and Now Interview: Minister of Finance Cover Story: The Agony of Dan Zwirn Strategies: The Early Birds Are Awake Strategies: The Call of Shari’a Profile: Sweet Home Chicago Research Center: What Stampede? Alpha Bytes: Centralize the Data Unhedged: Commentary: Learning from the Wreckage

Institutional Investor's Alpha Magazine - November 2008

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