Why Long-Only Risk Tools Fail Hedge Fund Investors

A misreading of risk is a key factor in the growth of the leveraged fund-of-funds business.

As institutional investors such as pension funds have poured into hedge funds in recent years, they have demanded, and often received, a great deal of risk information from hedge fund managers. Too often, however, investors are using -- to their detriment -- risk management techniques developed in the long-only investment world.

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