MyPrivateBanking Blog
Daily Comments on the World of Wealth Management

Posts Tagged ‘Hedge Funds’

Hedge Funds Almost Up to Pre-Crisis Levels Again

Tuesday, April 12th, 2011

The hedge fund industry is up and thriving again. Here is an interesting discussion of the topic. Note the fact that investors are still not willing to put pressure on the hedge funds for lower fees. It seems that hedge fund investors’ memory is even more short-lived than expected.

To expand on this topic: research shows that performance fees as used by hedge funds don’t do much to align the interests of hedge fund managers and their investors:

““Thus, our findings suggest that in most circumstances pay for performance alone is not sufficient to align agent and principal interests in the hedge fund industry”

 

“No human or strategy can consistently beat the market”

Monday, August 9th, 2010

James Altucher is one of the least arogant and most knowledgeable hedge fund managers I have come across. He is a great investor but has also started some great businesses like stockpickr.com. In addition, James has written several books on investing. The Kirk Report has just run a long interview with James:

“The only three things that are important are discipline, persistence, and psychology. Without those three things there isn’t a strategy in the world that will work for you. With those three things, just about any strategy will work.(…)No human or strategy can consistently beat the market. The best traders I know are some of the most humble guys out there and have no arrogance on their market opinions at all. They are able to switch opinions and strategies very quickly. I would say that over the years any arrogance I had about any strategy has probably disappeared and now I’m appreciative of just about any strategy out there as long as it comes with persistence, discipline, and positive psychology.”

Very  wise words, indeed.

 

“Hedge Funds Are to Bankers…

Monday, July 12th, 2010

…what the German football team is to the English: a nimbler, more skilful exemplar serving to highlight the latter’s plodding predictability.”

I am not sure if this quote is more flattering to the Germann football team or to the hedge fund managers. It is from a book review in the Guardian about More Money Than God. Whatever you may think about German and English football, the book is worth a read.

 
 

Many Hedge Funds Misrepresent Truth

Thursday, October 15th, 2009

A paper from the Stern School of Business reports:

“We find that misrepresentation about past legal and regulatory problems is frequent (21%), as is incorrect or unverifiable representations about other topics (28%).”

The researchers have looked at 440 hedge funds that had to undergo due diligence. We are not surprised - given the non-existent transparency of the sector. What we find even more annoying is the fact that wealth managers keep pushing these products into the portfolios of their clients. In our Private Banking Report 2009 we found that about 20% of assets were allocated to so called “alternative products” in the investment proposals of the banks (this category includes hedge funds and private equity among others).

 
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