Hedge Funds Go For a Makeover

Hedge funds investors are overwhelmingly happy with their investments in the lightly regulated investment pools, despite indications that average fund results will be underwhelming in June for the third consecutive month.

Conservative institutional investors such as pension funds continue to pour money into hedge funds, suggesting that the much scrutinized $800 billion industry is successfully recasting itself as a haven from bear markets, rather than an arena for dramatic gains from speculative bets.

To get larger sums of money to manage, Wall Street's cowboys have traded in their pickups for minivans, and the image makeover seems to have worked. In 2003 alone, hedge fund assets under management grew from $592 million to $795 billion, a 34% increase, according to the Hennessee Group, a New York investment advisor that creates custom portfolios of hedge funds. ...