Morningstar puts hedge fund data online

Date: Thursday, June 29, 2006
Author: Aaron Siegel

Subscribers of Morningstar Direct, a web-based institutional research platform, have had access to the complete hedge fund database since 2005, and the newest edition of Morningstar Direct will include hedge fund research reports written by Morningstar's new hedge fund analysts.

Registered members also have the ability to search key data points, including fundamental risk and return metrics, management background, and fees.

Advisor Workstation Office Edition will also include hedge fund data in its newest version, which Morningstar expects to release in the coming weeks.

"With more than $1.5 trillion in assets, hedge funds have fast become a significant vehicle for investment. Despite their growth, there is a lack of information on hedge funds, making research difficult and oftentimes expensive," said Morningstar chairman and chief executive Joe Mansueto, in a statement.

Morningstar Inc. announced today that it is expanding its hedge fund initiative by launching hedge fund data on Morningstar.com and on Morningstar Advisor Workstation Office Edition.

Chicago-based Morningstar has built a database of more than 3,000 funds during the past two years and continues to add to that number

"We hope to bring more transparency to the hedge fund industry to help investors better evaluate and compare these investments."

Some hedge fund experts remain skeptical.

"Hedge fund peer groups are not the right thing to do in terms evaluating performance," said Ron Surz, president and chief executive of PPCA Inc. San Clemente, Calif. and principal of Risk Controlled Growth, a fund-of-funds of hedge funds.

"Hedge fund peer groups have documented deficiencies and the real problem with hedge fund peer groups is that one hedge fund does not behave like any other hedge fund. There is no way Morningstar can resolve this problem."

For evaluating a hedge fund manager you cannot rely on a peer group, he added.