It is clear that there has been a huge increase of interest in hedge funds over the last few years, particularly because of their ability to outperform, especially in down markets, and their concentration on absolute positive returns in all market conditions. Recent headlines ranging from "Hedge Funds to the Rescue" at one extreme to "Sell-out: Why hedge funds will destroy the world", at the other, are evidence of their actual or perceived economic clout. The European industry has indeed grown dramatically - European hedge fund managers now manage USD 325 billion - and it is no longer the preserve of the super rich client. New investors, institutions and moderately affluent individuals, have been attracted. Sooner or later the ordinary retail investor will demand access to this honey pot. And why not? How should regulators and legislators react to the surge in popularity of hedge funds, an industry little understood by the big, wide, suspicious world out there, but one that can be ignored no longer?
