MAR's 9th International Conference on Hedge Fund Investments, being held Monday and Tuesday at the Fairmont Southampton Princess, is one of the best-attended conferences ever held in Bermuda. Some 950 delegates are due on the Island for the conference.

Along with the traditional speeches, panel sessions and break-out groups, the conference includes a trade fair of almost epic proportions, at least by Bermuda standards. Representatives from almost 100 organisations and jurisdictions are present, offering every conceivable kind of advice, software and free gifts to a captive audience.

The key word in the last sentence is "jurisdictions". Bermuda is represented, of course, mostly by the banks, Bermuda Stock Exchange and other financial institutions. Equally dominant at the trade fair, and more so among the delegates, are the Cayman Islands. Truth to tell, hedge funds have become something of a Cayman specialty. They do not make the Bermudian mouth water in the same way that reinsurance does.

Perhaps that is as well. As one software supplier put it: "there is so much offshore business to go around, and so few jurisdictions that maintain the standards these players" - at this point he waved his arm to indicate the hundreds of golf-shirted hedge fund mavens thronging the Fairmont Southampton - "are looking for, that you guys have to learn to share."

Hedge funds have nothing to do with topiary. They are a generic term for alternative investment strategies that cast their net wider than simply buying or selling equities. The best hedge funds increase the potential rate of return without necessarily accommodating an equally increased risk. Hedge funds are esoteric and complicated investment vehicles, once on the very cutting edge of investment techniques.

The bear market that has marked the start of the new millennium has done much the same for hedge funds that it has achieved for ordinary mutual funds, i.e. made a decent rate of absolute return absolutely difficult to come by. The best metaphor for understanding what has happened to hedge funds may lie in an unrelated field, Bermuda tourism.

Both hedge funds and our hospitality industry were once the terrain of the few, the well-to-do and those in the know. Then a great democratisation opened up the franchise to all comers, and suddenly Joe Blow was strolling down Front Street and investing in hedge funds. In neither case, it might be argued, has anyone done very well out of the change.

The smart money in the past 12 months has gone to commodity futures and the like, the riskiest of investments. The race for meaningful returns has embraced investment instruments roughly as dangerous as gunpowder, and approximately as likely to blow your head off. The investment industry, however, lives on fractions of a percentage point and hedge funds, of late, have not been racking up sufficient fractions.

The delegates to this conference are service providers, analysts and a number of actual traders. The last could be spotted standing outside the hotel, barking instructions into their cell phones. Everyone else was wandering the aisles at the trade show, collecting free gifts of a much higher quality than their insurance counterparts are used to picking up.

Among the unofficial winners in the free gift stakes:

*: the Bank of Butterfield's bear hand puppet that turns inside out to become a bull hand puppet.

*: a fine cake tin from Conifer Securities (every delegate scored one), containing not cake, but a neo-classical clock, quite the trophy. The battery will, sadly, run out one day, but the cake tin is forever (except in Bermuda's humid climate).

* : RealTick by Townsend Analytics.

* : a spectacle case from Stoxx, containing half a dozen chocolate Euros. Sadly, the chocs are a gift from "Europe's best indexes," the same spelling mistake made by an oddly-shaped pen in everyone's bag, a gift from Dow Jones Indexes. The word, of course, should be "indices".

* : Many booths offer free squeezable balls, to allow executives to crush their rage when stocks collapse or options fall out of the money. One of the accounting firms (forgive me, I forget which) is offering mini-basketballs, which are this year's biggest balls. Chubb's ball is in the shape of a bag of money, with a $ symbol on it. Full marks.

*: The Bermuda Stock Exchange offers a strangely gelatinous ball, containing a modern equivalent of the Magic 8-ball. Ask it a question, squeeze it and read the answer. For instance: Is now a good time to invest, followed by a squeeze, gave the answer: "Hold on tight". Good advice, that.

*: Rothstein Kass & Co., public accountants, offer delegates a ruler with a calculator built in, quite the most practical free gift on hand.

* : A close thing, but the Cayman islands Stock Exchange gets the nod for its ant-carpal tunnel syndrome wrist support.

* : Among the muscle relaxers, back rubbers, pens, pencils, key rings, cake tins (the Caymans have a real cake, but it comes in a box), squeezables, business card holders, knives and what have you, the clear winner, for design and utility, is the Bermuda International Business Association's combination radio and flashlight.

Once again, Bermuda leads the field. Bravo.