Federal Reserve Chairman Ben Bernanke had good things to say about hedge funds and private equity to the House Financial Services Committee last week. Bernanke told the committee that the two asset classes are a benefit to the U.S. economy, because they help share risk and provide a good deal of liquidity which helps the market work more efficiently. Additionally, the investment vehicles play a role in how well companies are run. Bernanke noted that a model for taking over and improving companies that are poorly managed is needed, and that hedge funds and especially private equity, perform this function.
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