If actions speak louder than words, then many money managers seem to be screaming right now. This week has seen the announcement that GLG Partners, one of Europe’s largest hedge funds, is planning a £1.7 billion float on the US stock market. If it does, it will be jostling with several of its rivals. Last year saw hedge funds like Ashmore Investment Management and BlueBay Asset Management obtain public listings.

Beyond the hedge fund industry, several private equity groups have also launched onto the market, including the likes of Fortress and Blackstone.

Nearly all have gone well. BlueBay, for instance, which floated at 300p a share, is now trading more than 50 per cent higher at 465p. Ashmore has seen its shares rise by at least 100p above its 170p launch price. And more recently a name familiar to many investors has found the stock market very receptive to its blandishments.

The value of Hargreaves Lansdown, the independent financial adviser, has soared to £1 billion after its shares flew from a float price of 160p last month to more than 200p. But Hargreaves illustrates the problem for outside investors. After a lengthy bull market in which these financial groups have grown fat, are the founders now getting out at the top?

One fund manager who knows this sector well suggests that investors would be right to be cautious. He worries, for instance, about the gearing of hedge funds to performance fees and the impermanence of its customers. “If you had a year when cash was king, then hedge funds would have miles lower performance fees,” he says. “The other thing is the sheer volatility of this sector – clients come and go the whole time.”

And valuations can be racy. Although admittedly they are in different sectors, it is interesting to compare the rating put on Ashmore with that of Hargreaves Lansdown. According to profit forecasts supplied by Hemscott, the data provider, Ashmore is trading on a multiple of a little under 16 times next year’s earnings. By contrast, Hargreaves shares are valued on a price-earnings ratio in the mid- to high-20s, according to press reports.

Add that to the fact that the eponymous founders, Peter Hargreaves and Stephen Lansdown, have pulled out more than £150 million in cash at the float and alarm bells should be ringing. Even more so when an even cannier operator has been cashing in. Earlier this year, New Star’s founder, John Duffield, took the opportunity of the fund’s first full set of results since floating in November 2005 to raise £155 million for himself. He was able to do so because the handcuffs preventing big holders selling in the wake of the float had been released.

Prudent investors looking for direction should read the actions – not the lips - of founders behind the more recent string of floats. Anyone who unloads shares now is being more eloquent than any words they could utter.

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