Morningstar Advisor - Spring 2007 - 6

Contributors Ryan Tagal, Daniel Farkas, Gareth Lyons, and Nadia Van Dalen Writing Morningstar Advisor’s spotlight section (page 20) confirmed for Morningstar’s hedge fund team the difficulties advisors and their clients face when it comes to investing in hedge funds. “It was sobering to be reminded of just how undemocratic the hedge-fund world is,” analyst Gareth Lyons says. “We have a ways to go before the average investor will be able to gain access to a top-tier hedge fund manager who pays close attention to after-tax returns.” Taxes concern analyst Daniel Farkas, too. “The fact that tax-efficiency is such a nonissue in most hedge fund analysis exemplifies just how much hedge funds are tailored for non-taxable investors. It was eye-opening to look at the impact that the structural characteristics of the hedge fund industry has on individual investors, who are an afterthought.” Still, writing the section was a chance to present some levelheaded analysis to balance out all the hype hedge funds are getting in the financial media nowadays. “It’s easy for investors to get caught up in it,” analyst Nadia Van Dalen says. “Don’t get me wrong, there are some great hedge fund managers out there, but most are not worthy of the fees they charge. You must arm yourself with good information to filter out the losers.” Ryan Tagal, Morningstar’s director of hedge funds and alternative investments, agrees. “Advisors want impartial answers, and that’s Morningstar’s forte.” Karen Dolan As a mutual fund analyst, Karen Dolan frequently interviews managers, but her profile of Arnie Schneider (page 46) forced her to alter her approach. “I had to take my analyst hat off and try to see the more personal side of Schneider,” she says. “I paid special attention to the intangibles, and they only reconfirmed my opinion of Schneider’s investing capabilities.” She also got to talk with some advisors. “I was surprised at how much we had in common,” she says. “In a lot of ways, we’re striving toward the same goal: To find good managers who invest well.” Laura Lallos Laura Lallos’ feature on fund manager Scott Brayman (page 41) marks her return to both journalism and Morningstar. She served as an analyst and editor at Morningstar from 1993 to 2000 and covered mutual funds as a senior writer for Money until 2002. She then earned her J.D. from the University of Chicago and is raising her young daughter. Getting away from a dreary Chicago winter to interview Brayman in Burlington, Vt., was almost as good as a vacation, Lallos says. “I flew in at night, and when I woke up and saw the view from the hotel window, I wanted to add another day to my trip. Brayman isn’t exaggerating when he describes the ‘Green Mountain handcuffs’ that keep his team working happily together in Burlington.” Lloyd Miller In illustrating the cover and inside features of the magazine, Lloyd Miller wanted to avoid using the standard investing symbols. “For me the ‘murky world of hedge funds’ was exactly that when I began illustrating this project,” says Miller, whose work has appeared in The New York Times, The Wall Street Journal, The Washington Post, Esquire, Fortune, and Money. “I tend to have a blind spot for the finer points of investing anyway,” he says, “so it was interesting coming up with pictorial analogies to making information comprehensible without employing financial imagery, which I try to avoid if possible.” 6 Morningstar Advisor Spring 2007

Morningstar Advisor - Spring 2007

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