Hedgestock
New York TImes - June 9, 2006
I Saw a Deadhead Sticker on a Bentley
By HEATHER TIMMONS
This week, on spacious lawns surrounding a turreted, gargoyle-
encrusted mansion north of London, thousands of hedge fund managers
and the bankers and lawyers who love them gathered for their own
alternative festival, called Hedgestock.
Billed as a gathering place for the misunderstood, sometimes unloved
but highly successful facet of the finance industry, Hedgestock aimed
to marry the ideals, music and fashion of the 1960’s with a
networking event for the hedge fund world.
Or, as attendees from DKR Capital advertised during the event,
“Peace, Love and Higher Returns.”
The grounds of Knebworth House were strewn with a painted Volkswagen
bus and clean-cut guys wearing strings of love beads, floppy hats,
tie-dyed shirts and bell-bottom jeans.
The Who, who played at Woodstock, headlined Hedgestock, and the
band’s guitarist, Pete Townshend, now 61 years old, did, in fact, do
his trademark windmill guitar moves.
“Ringo Starr’s son was the drummer, and he was fantastic,” Jeremy
Polturak, with Solent Capital, said.
There was little evidence that hedge fund attendees were ingesting
anything stronger than Moët & Chandon champagne, which had taken out
a booth.
The watch maker Breitling and the luxury car manufacturer Bentley
shared a display.
Of course, there were more than a few nods to the money-making aspect
of the whole industry. In addition to the Who, there were bands with
names like HedgeStone and Red Herring, some with hedge fund manager
musicians.
A cricket match pitted the Hunters (for hedge fund managers) against
the Scavengers (for the industries that service them). There were
awards in categories like “best execution O.T.C. derivatives” and
“best compliance consultant.”
Merrill Lynch, undoubtedly bullish on the whole idea, had brought an
inflatable bull that was highly unstable and hard to ride, perhaps a
nod to how difficult it is to harness unpredictable markets.
In the same vein, Michael Romanek, the director of alternative
investments for Fortis Merchant Banking, arrived at Hedgestock by
diving out of a plane, though naturally he was wearing a parachute.
Perhaps, despite the incongruity, the event makes sense on some levels.
Unlike the perfectly polished, traditionally dressed and generally
suave investment bankers who top the food chain in big banks, hedge
fund managers have carved out a niche as the finance industry’s
iconoclasts. They do yoga; they buy modern art; they’re often
socially awkward.
But if they’re good, they’re also often wealthy. According to Alpha,
a magazine that covers the industry, the 26 top hedge fund managers
took home $130 million or more each in 2005.
They have also turned charitable donations into a competitive sport
and Hedgestock was no exception. All the proceeds from the £500
($930) entry fee went to a charity for teenage cancer victims, for an
expected total after expenses of more than £500,000 ($930,000).
Beneath all the costumes and the music, though, Hedgestock really was
a massive speed-dating session for hedge funds. The big banks that
have hedge fund clients, including Goldman Sachs, Credit Suisse and
Bear Stearns, laid out bars and couches for meetings, including those
with institutional investors who want to expand their hedge fund
portfolios.
Hedgestock attendees clutching electronic tracking devices called
Spotme’s, which look a bit like horizontal BlackBerries, wandered
across the lawns and through tents, waiting for the beep that told
them their next appointment was nearby.
Sparsely attended discussions about the industry carried an upbeat
messages. “In the hedge fund environment, demand way outstrips
supply,” said Budge Collins, of Collins Bay Island Securities. “We
won’t see any softness of fees.” Still, isn’t there something just a
little cringe-worthy about a bunch of incredibly wealthy people
appropriating the trappings of a generation whose values were nearly
the opposite?
When the question was posed to hedge fund managers attending the
event, they had two words: lighten up.
“That’s the funny part,” said Ted A. Parkhill, vice president with
John W. Henry in Boca Raton, Fla.
But Jonathan Watson, who teaches a class called “The U.S.A. in the
1960’s” at the University of Sussex in England, said, “It does seem
crass to use an association to an event that espoused peace and love”
as a gathering for making money
On the other hand, he added, “it is worth noting that the organizers
of Woodstock made a great deal of money out of selling the movie
rights.”