Will Hedge Fund Frauds Help Mutual Funds?
With a number of high profile hedge fund frauds, most notably the downfall of Bernard Madoff's fund, will investor's begin to shift assets from lightly regulated hedge funds to the more regulated mutual fund industry?
According to Stephan Kunze of Deutsche Bank, "there'll be a drive clearly toward more transparency and stricter supervision. That could be good for mutual funds."
Over the last several years, a class of mutual funds have developed that in many ways mimic hedge funds. Will niche and high turnonver mutual funds attract assets from the hedge fund industry? Maybe so, particularly until the hedge fund industry can regain the trust of their potential clients.