Article: The Three-Year Plan; Raleigh, N.C., fund hopes to be a multibillion-dollar fund management firm by 2012.(Hedge Funds)(Himanshu Shah of Shah Capital Management)(Company overview)

Byline: Jakema Lewis

In a post-Madoff world, investors are understandably skittish about placing their assets in hedge funds, but a four-year-old Raleigh, N.C., fund hopes to win them over with its history of steady returns.

"There are three alternatives that the pension plans have to deal with considering the fact that they are quite underfunded," says Himanshu Shah, chief executive of Shah Capital Management, which was founded four years ago.

As Shah sees it, pension plans "can either raise taxes or cut retiree benefits. The last option is they can earn their way out by having better-performing managers on their platform. The first two ...

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