The Journal of Portfolio Management has two very enlightening articles written by Clifford Asness, a managing principal at AQR Capital Management, LLC, about hedge funds. The first article An Alternative Future – Part I in the 30th Anniversary issue of JPM lays out the positive case for hedge funds in the construction of investment portfolios. The subsequent article in Fall 2004 issue An Alternative Future – Part II discusses some of the issues from the darker side of hedge fund investing. The articles together make an excellent framework for the much needed discussion about the relative value of hedge funds, especially as defined benefit and other pension plans consider upping their allocation to the Alternative Investments asset class. (Hat tip to Barry Schachter at Bel Ranto blog.)

Toomre Capital Markets LLC encourages interested parties to join the discussion about how to obtain true Alpha returns and at what cost. The discussions about Hedge Fund beta and what associated fees are "appropriate" no doubt will continue to be lively.