The $25K Cure For The Moody's Blues

Date: Friday, September 8, 2006
Author: Dailyii.com

A little publicity is turning into a big business move for Moody's Investors Services. Just a couple of days after trumpeting the launch of its hedge fund rating service and projecting 20 such ratings by year's end, the firm's Kevin Gains told The Times of London that Moody's has been "inundated" with calls from HF managers begging to sign on. As it turns out, some of the Moody wannabes may feel blue after discovering the price tag for the rating treatment is a minimum $25,000. Because of the cost, says Gains, a Moody's analyst, the service may be appropriate only for bigger funds, say, those with $80 million AUM. Nor will hedge funds ever be invited for a rating, adds Gains, who said in The Times interview, "We won't make any unsolicited analysis on hedge funds." The Moody's rating does come with a nice accommodation: If a hedge fund is found to have problems and would receive a less-than-glowing evaluation, it can opt to keep the rating private until it works out its kinks. The so-called "indicative rating" option will allow low-raters to decide whether to proceed with a full-blown rating.