NEW YORK — Hedge funds are being offered a deal to help the feds rescue the banking system: A low-risk opportunity to buy bad bank assets that could one day make them a killing.
But the deal could make for an uneasy partnership. The government also wants to closely police hedge funds — large investment pools that cater mainly to the rich — some of which have been accused of placing irresponsible bets that helped trigger the financial crisis. Such regulatory overhaul could reshape an industry known for secrecy and little oversight.
“You don’t want to paint a bull’s-eye on your back,” said Steven Persky of Dalton Investments, a Los Angeles hedge fund. He and others want more details on the bad-asset deal and assurances that hedge funds won’t be hit with heavy-handed restrictions if they do participate.
