Long/short mis-labelling rife

Some hedge fund strategies are being mis-marketed as long/short in funds of hedge funds whereas they are actually long-only in disguise, according to Gilles du Fretay, president of French fund of hedge fund manager HDF Finance, opening the fund of fund business to reputational risk if things go wrong. du Fretay said the fund of hedge fund industry's reputation could suffer if a liquidity crisis hits these funds – found mainly among emerging markets, distressed and high yield strategies – and investors find out they have been sold essentially long-only funds. "Hedging means producing absol...