Former US Secretary of State Madeleine Albright has set up a hedge fund in Washington, Slate notes. The emerging-markets hedge fund, Albright Capital Management is backed with $329 million in seed money from PGGM, a Dutch pension fund.
Albright is more widely known as Clinton’s right-hand woman during the Balkan conflicts of the 1990s than as a savvy, Buffett-esque investor with a history of generating above-average market returns. But Albright is merely going where her peers have gone before – from ex-SEC head Richard C. Breeden to Dan Quayle, who describes his role at Cerberus as “travels throughout the US, Europe and Asia to meet with the heads of investment banks, corporations, buyout shops, potential investors, and other business leaders.”
But Slate writer Daniel Gross sets aside the question of whether the arrival of politicians is a neon sign to hedge-fund investors to cash out now, and asks instead: why do hedge funds want ex-Washington hacks?
Two reasons, Gross says: fund-raising (big names are good for sales pitches) and political door-keeping. “Given the political issues that frequently surround international investments, funds need gray-haired globe-trotters to smooth the way,” Gross says.
So is it fair to expect more career switches as big institutional investors such as pension funds increasingly turn to hedge funds?
Gross thinks so. “By 2009, it wouldn’t be surprising if investors were listening to sales pitches for CRAM (Condi Rice Asset Management), Dick Cheney’s Buckshot Capital (sole holding: Halliburton), and the Stuff Happens Global Fund, an arbitrage operation run by Donald Rumsfeld,” he opines.