In July this year, Moody’s Investors Service announced its criteria for rating hedge funds; in September, Standard and Poor’s followed suit.
Critics have been quick to highlight their failings. Federal Reserve Bank of New York president Timothy Geithner expressed his concerns at a conference in Hong Kong, saying that the ratings would do little to help investors gauge the merits or demerits of investing in hedge funds.
Funds of hedge funds, which can perhaps be seen as having the most to lose from a rating system, have been quick to agree.
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