[Update: Full Results for the Hedge Fund Report Card.]
By Britt Erica Tunick
Getting good grades from hedge fund investors requires more than just good performance these days. In AR's inaugural Hedge Fund Report Card, alignment of interests tops the list of investor concerns. Investors were asked to rate the top 50 firms in our Billion Dollar Club in which they are invested by considering six factors—alignment of interests, alpha generation, independent oversight, infrastructure, liquidity terms and transparency.
The results indicate that a year of los-ses, coupled with the Madoff scandal, has changed what investors want. "The basic statement you're hearing these days is, 'First, don't blow me up, and then make me some money'," says one investor polled. Making money still matters, of course, and the highest-ranking firms had the best performance last year, while those at the bottom have disappointed investors.
The top three winners scored in...