Hedge funds need to trim business with banks

Hedge funds have never been short of critics. They have been accused of overcharging, underperformin...

Hedge funds have never been short of critics. They have been accused of overcharging, underperforming, destabilising the financial system and ripping off investors. Still, there is one charge that might have some substance to it: an unhealthy relationship is emerging between hedge funds and investment banks. Indeed, the greatest risk posed by the funds may be to the banking industry. Earlier this month, New York-based Credit Suisse First Boston (CSFB) examined how much money the world's hedge funds were paying to their investment bankers. It came up with an estimated total of $25bn for 20...