Investing in hedge funds is hot again, but this time with a difference: many investors are buying insurance against losing money. A curious concept, you might think, for such a risky game. Yet investment banks are selling capital protection, for a price. Some financiers fear that the risks their rivals are taking in offering such protection will be unhedgeable in times of market distress. That, after all, is why portfolio insurance failed in October 1987, accelerating the markets' free-fall.
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