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60 minutes watching Tiger Woods-Now very interested in a Hedge Fund**Anyone with knowlege of hedge Funds here?
- Thread starter swolenole
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slat1
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I traded for a hedge fund up until a year ago in October. The minimum investment is $1,000,000. There is a 1% management fee and the company gets 20% of the gain. The lowest return they have ever had is 15%.
If you have the cash we can have a sit down.
BTW. You would be very surprised who invests in hedge funds... banks, cc companies, actors, athletes, RE moguls. Its how the rich get richer!
If you have the cash we can have a sit down.
BTW. You would be very surprised who invests in hedge funds... banks, cc companies, actors, athletes, RE moguls. Its how the rich get richer!
those and large trusts are the only people i would even think would invest in a hedge fundslat1 said:
that's fukin awesome bro. did you work for a large fund? was your only job trading or did you know of other inside workings of the fund? did you ever get into legalities of running a fund? sorry for the interrogation lol but hedge funds REALLY interest meslat1 said:
Devastation said:
Averages are worthless for these types of data. Do you know the median? Is your information time-weighted or dollar-weighted?
What do you think interest rates have to do with hedge funds? I get contacted by many of these. I've done an assload of research. Most lose money. I don't touch them, and it's not because of minimums.
T
thread grader
Guest
<--- will run a hedge fund one day
Lestat said:
Yes, you work in finance. So does the register clerk at McDonalds, you cubicle dwelling monkey. Nah, just playing, I love stupid comments from people who don't know shit.
Here is some background for the benefit of readers who don't work in (lol) finance. Hedge funds aim for absolute returns, whether the market is increasing or declining. That said,
Most hedge funds invest in the same securities available to mutual funds and individual investors. You can therefore only reasonably expect higher returns if you select a superior manager or pick a timely strategy. From January 1994 to September 2000 - a raging bull market by any definition - the passive S&P 500 index outperformed every major hedge fund strategy by a whopping 6% in annualized return
http://www.investopedia.com/articles/03/121003.asp
When you aim for absolute returns, and you do worse than the index, you're losing money.
And before that, here is some more data
A study by Yale and NYU Stern economists, Off Shore Hedge Funds: Survival and Performance: 1989-1995, indicates that during that six-year period, the average annual return for offshore hedge funds was 13.6%, whereas the average annual gain for the S&P 500 was 16.5%. Even worse, the rate of closure for funds rose to over 20% per year, so choosing a long-term hedge fund is trickier even than choosing a stock investment.
Here is something from business week: http://www.businessweek.com/magazine/content/04_37/b3899105_mz070.htm
At first glance, hedge-fund returns look pretty good. Since 1990 hedge funds have earned an average of 11.9% a year, according to Citigroup (C ), which recently published a study on performance. Over the same time, the S&P 500 and the average stock mutual fund have risen 10.5% and 9.2%, respectively. But on a risk-adjusted basis, hedge-fund performance has declined in recent years -- and it isn't expected to rebound anytime soon
Here is the last one, proving that the data is worthless anyway.
http://www.fpanet.org/journal/articles/2004_Issues/jfp0204-art2.cfm
In terms of performance data, reported hedge fund performance is upward biased, incomplete and inconsistent across database vendors. Historical returns must be viewed skeptically because most vendors of performance information merely provide a conduit for data supplied by fund managers without independent verification. The impressive performance numbers reported for various hedge fund strategies create a distorted impression because participation in performance databases is elective, and one can safely assume that hedge fund managers opt to participate only after a period of good past performance. Hedge funds with poor performance are missing from performance databases, resulting in an overstatement of returns for the category as a whole.
So among managers who report, numbers seem good. Just less than indexes.
lol
here is why you hear so much about hedge funds of late: A few have had spectacular returns - guys like Lampert have made billions. They dominate the news. Hedge funds in general have done well because interest rates were really low in the US, and even lower overseas. SOme really big funds, like cerberus, bought overseas banks. But even if they did not, they were able to borrow money really cheap.
This money invested anywhere would make money, and the spread was wide due to the low interest. Furthermore, hedge fund guys did make some creative investments, buying things like catastrophe bonds which would never have to pay (especially on the first tranche). But this was not superior wisdom; they just followed the billions of private equity dollars into reinsurance. These bonds paid like 9%, so you collect 9% while borrowing at 1%, and you're going to look pretty smart.
But rates are going up, and those bonds are being re worded so they will actually be triggered. Like all good things, the short hedge fund run (which is overstated anyway) will come to an end.
