A hedge fund on your balance sheet, a cuckoo in your nest

A Scottish accountant has his own way of injecting the fear of God into his hearers. This must be one reason why Douglas Flint is finance director of HSBC, and made him the natural choice when his fellow accountants at Cima wanted someone to lecture on pensions. On the day, he came right up to proof. A company running a pension scheme, he said, might as well have a hedge fund on its balance sheet. On the backs of the necks of his City audience, hairs could be seen rising. Hedge funds, they thought: arcane, inherently risky and possibly dodgy — what were their companies doing in this sort of business? Up to a quarter of their scheme’s value, they were told, could be at risk to changes in the value of its assets and liabilities in any year — and these assets might add up to half of their company’s stock market value.