Welcome to the first edition of Schwab’s Corner. We believe you will find this insider’s report very useful.

We begin with a list of funds from Schwab Enterprise’s upcoming Leading Hedge Funds of NY. The list is comprised of the most established hedge funds in New York—the mecca for hedge funds.

While the news media this past year has focused on hedge funds that implode and shut down, we focus on the fact that there are more than 1,500 hedge funds in New York alone and fewer than 10% make our top 100 list. And New York is still the center of the hedge fund industry. No other state, or country, can yield a list of more than 100 firms each with assets in excess of $l billion and other assets that meet the strict criteria used for our guide. Some are stated below.

Therefore there’s a need for a guide that creates a “short list” of top New York funds, especially for candidates looking to find a position at a firm they plan to stick with a long time.

Here are a few of the criteria we used in selecting the firms:

• MUST BE a stand-alone hedge fund entity
• MUST HAVE at least a consecutive 5-year track record
• MUST MANAGE at least $1 billion in public equity assets

As a result of the criteria we used, we excluded the proprietary desks/hedge funds within investment banks or large asset management (long only) firms. Excluded too are some well-known multibillion-dollar firms whose inception occurred within the past four years. Also excluded are firms that invest primarily in private equity or in debt instruments, commodities, or other asset classes. Pure arbitrage or pure quantitative firms that do not conduct fundamental, company-specific equity analysis are also excluded.

We expect our list to change significantly from year to year since the industry continues to evolve at a still rapid pace.

Schwab Enterprise’s Leading Hedge Funds of NY will include a detailed profile of each firm, including equity investment performance, asset size, staff size, firm founder/general partner information, and SEC registration information.

The data for this guide were compiled from numerous public and research sources. The accuracy of these data was confirmed wherever possible with the firms themselves. The data are based on information through year end 2007.

To contact us regarding this article, please e-mail comments@schwabenterprise.com