Greenwich Associates and SEI have published a white paper that reviews the growing importance of transparency, fee flexibility and liquidity in the Hedge Fund Marketplace.

"The survey revealed a continued commitment to hedge fund investing among institutions as nearly 80 percent of all survey respondents said they have no plans to change their hedge fund allocations in the next 12 months, while 15 percent expect to increase their allocations. What will change is their demand for transparency. Over 70 percent of respondents reported requesting more detailed information from managers than they did a year ago. While the type of information sought ranged from counterparty and leverage exposure data to sector and position-level detail, over 80 percent of the respondents reported a focus on funds� valuation methodologies. Investors also continue to exert influence on fee structures, as nearly one in five respondents reported negotiating fee arrangements different than the standard �2 and 20� for single-manager funds and �1 and 10� for funds of hedge funds over the last year."

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Tilton, who employs more than 100,000 people in her 70 portfolio companies says that in "With more than 70 portfolio companies across a dozen industries, I have yet to see the green shoots of recovery.  Revenue lines, despite significant declines year over year of 20-50%, reflect no major revival in top line growth."  Likewise, she suggested that little of the money that was originally designated to keep liquidity in the markets for consumers and industry has actually found it’s way to the heart of the economy, the small to midsized companies with fewer than 500 employees who employ 80% of Americans.  She observed that while $13 trillion has been set aside for financial firms, a far smaller amount has been put aside to aid manufacturers. 

Tilton recommends the following to save and reinforce manufacturing:

(1)  A TALF or PPIP like fund that would provide liquidity to manufactureres

(2)  A provisional Federal bank to see this through

(3)  A realignment of priorities within the Obama Administration focusing on areas where jobs are created, not saved.

When questioned by the audience about America’s labor costs, Tilton observed that most of our trade partners protect their industries at a rate far higher than our labor costs.   She noted that less than 30% of the cost of manufacturing textiles is in labor and that China has a 40% subsidy on cotton from the government for textile production.  Likewise VATs from other countries are an obstacle to trade for the U.S.

The full text of her speech can be found here, http://patriarchpartners.com/dust2diamonds/