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Convergence in action

Over the last few years hedge fund managers and private equity managers have been distinct categories of alternative asset investors, says David Goldstein of White & Case. All that they have had in common was that they represented private pools of capital. But that has been changing on many levels.

The disagreements in the private equity fund community over the roles of hedge fund managers in non-traditional hedge fund investments reveal a range of emotions, from concern by the private equity folks for their futures, to hostility towards the hedge fund managers about their new roles.

Henry Kravitz famously commented: "Hedge funds know how to pick stocks and make money, but that is not the same thing as creating value through ownership of an asset over the long term in a hand's-on way. They lack the right skills or experience to make a success of turning around or building private companies."

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David Goldstein

David Goldstein is a partner at the New York office of White & Case. The content in this article was originally presented at the first joint meeting of the Hong Kong Venture Capital Association and the Alternative Investment Management Assocation in April of this year.