Biofuels and droughts can't fully explain the recent shortages—hedge funds and small investors bear some responsibility for global hunger
23 April, 2008, Beat Balzli and Frank Hornig, BusinessWeek
Not long ago, Dwight Anderson welcomed reporters with open arms. He liked to entertain them with stories from the world of big money. Anderson is a New York hedge fund manager, and as recently as last October he would talk with enthusiasm about his visits to Malaysian palm-oil plantations and Brazilian grain farms. "You could clearly see how supply was getting tight," he said.
In mid-2006 Anderson was touting the "extraordinary profitability" of field crops from corn to soybeans. He was convinced that rising worldwide hunger would be synonymous with highly profitable—and dead-certain—investment bargains.
In search of new investments, Anderson sends dozens of his employees to visit agricultural regions around the world. Back in New York, at his company's headquarters on the 27th floor of an office building high above Park Avenue, they bet on agricultural markets from Peru to Vietnam.
But in the towers above Manhattan's urban canyons, it's easy to lose touch with the ground. Hedge fund manager John Paulson was recently...
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