International Funds

and economies. But any criticism of them should be balanced with their capital-

raising and liquidity supplying role and the fact that in a free market they are often the

clearest means of allowing investors to vote with their feet (or indeed their pockets).

Hedge funds – even where they invest primarily in derivative products as opposed

to the underlying assets – perform a particularly important capital-raising function for

the less-liquid markets. Where derivative products have been developed and are

offered by a particular market, they exist to provide a risk management and capital-

raising mechanism for various economic operators; and in buying ...