George Van Predicts Booming Future For Hedge Funds

Investors Offshore, New York

06 September 2002

Speaking in Nashville, Tennessee, this week, George Van, Chairman of Van Hedge Fund Advisers International, said: 'During the current 28-month bear market, from April 1st, 2000 through July 31st, 2002, while all major equity indices have plunged, hedge funds not only have kept the bear at bay, but have made money.'

'Since the end of the first quarter, 2000,' said Mr Van, 'the major equity indices have declined approximately as follows: the S & P 500, -37%; the NASDAQ, -71%; the Dow, -17%; and the Average Equity Mutual Fund (AEMF), -36%. By contrast, in this horrible market, the average US hedge fund has gained 1.9% net.'

'This is still another in a long series of statistics which show clearly the protection hedge funds provide investors in bad times as well as outperforming equity mutual funds and the equity markets over time.'

'The excellent bear market performance of hedge funds has accelerated the demand for them throughout the world - a demand that's moving them from the shadows to the stock markets of the world. They are now being listed on various European exchanges, and in the US are being offered in closed-end mutual funds.'

'However, notwithstanding all the evidence that hedge funds have better returns and lower risks than stocks and mutual funds, surveys show that the majority of qualified investors still say they do not know enough about them and believe them to be more risky than other investments. While this perception is being corrected over time, it is changing slowly. When reality sets in, the potential market for hedge funds will be huge compared to today.'

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