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August 12, 2005
The Philanthropic side of hedge fund managers
The growth of hedge fund industry has also initiated a wholesome effort towards improving the lives of the underprivileged. Hedge fund industry has grown from $15 billion 15 years before to over $1trilion now. The amounts spent on philanthropic activities by these funds have also grown. The high growth, high return arena has made millions for many including the managers themselves who charge up to 20%of the profits plus a management fee of 1-2%of the total assets. As such the number of charity organizations has increased – to name a few -‘Hedge Fund Care’, ‘Robin Hood Foundation’ and ‘100 Women in Hedge Funds’. Some make a big deal about the donations and see it as an avenue to socialize and hob-nob with the rich and the famous including glamorous movie stars. While some do it for saving taxes. Some donate as a part of ‘social responsibility’ clause of the firm’s charter. And a smaller fraction donates anonymously as a call from the heart. What ever the reason for contributing to towards a altruistic cause, the underprivileged are benefiting. Way to go Hedge Funds! Nytimes.com reports:
“Managers of hedge funds - private pools of managed capital that have historically produced outsize returns while charging unusually high fees - can take home as much as 20 percent of the profits.”
Read More: Fund Managers Raising the Ante in Philanthropy
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