Thread: Hedge funds failure rate

Anybody did a study on this topic ?

I read crazy numbers like 80 percent but it seems somewhat exaggerated.

Originally Posted by ;

Anyone did a study on this topic ? I read mad numbers like 80% but it seems somewhat exaggerated.

Anecdotal to be certain, but hedgies are only you and me with a lot more capital to play. If you can't double 100 dollars you can't double 1MM and vice versa.

Yeah jmn, however they are a lot more prepared than you and me. I think before starting a hedge fund, one must spend years in training/eduion.

Originally Posted by ;

yeah jmn, however they're a lot more ready than you and me. I think before starting a hedge fund, one must spend years in training/eduion.

Nope. All you will need is the funds to get the needed certifiions and also also the capacity to construct a client base, and you also, may be hedge fund. I would also submit that it requires years in eduion and training to be a fantastic trader as well. Look at the queries on a number of these threads.

Originally Posted by ;

quote Nope. All you will need is the funds to get the certifiions and the capacity to build a customer base, and you too, can be a hedge fund. I would also submit to you that it requires years in training and instruction to be a fantastic trader as well. Look at the queries on some of these threads.

The question is, how do you anticipate hedge funds ?

The same as any profession; you consistently find 80% or more losers

not all bakeries profitable; eventhough we are eating bread !

Of all transactions (like hedgies) farmers are the one paying the deer price of failure. Waiting for a year to the harvest; only to go up belly; is hard.

Most of them are only monkeys in suits.

Originally Posted by ;

now the question is, would you trust hedge funds ?

You want to take care of each one on its virtues, and perform your own due diligence.

ok. . This might seem like I believe I know what im talking about, but in the event that you could just humour me.

Firstly, anyone who has worked at a hedge fund for some time if know better than to state he/she works at a hedge fund. Best described as a private investment company or something. If you state hedge fund you can see the individual looking around with which to damage you a lot, typically an iron bar.

There is a massive range of various types of hedge funds. All kinds of different equity classes, credit funds, emerging market funds, orderly, private equity, etc etc.. A listing.

The class most comparable to this space are macro trading hedge funds, so I shall stay with people.

All hedge funds have their partnership egory as a big part of the AUM in that fund. This is insisted on by investors. In fact the biggest single investor is going to be the fund's spouses.

Fee structure historically: 2/20. 2 percent mgmt fee and 20 percent of the profits. This structure has come down a lot in the last few years since yields have been very poor. For instance very very few macro hedge funds made money this past year and the previous years returns are low (sub 5 percent kind reduced). If you would like to charge 2/20 kind stuff you deliver.

There appears to be a small tone within this forum that professional traders all make cash. Let me tell you, that ai not true!
There are very few traders that make money. Well, for a clearer on that: I know traders who could make cash, but I know very few traders who go on to make more cash and can keep that money. There will be market requirements that match every trader at a certain stage so each one will have periods when they could make money. Living and adapting in most markets conditions is not the same story.

Within my market life in do not believe I could name over 10 traders that I was able to honestly state will make money.
The small handful of the ones that come into mind are very very good.
As to hedge funds being monkeys in suits. Im not sure that is fair. Yep, there are plenty of grubs around but for the most part they're just people trying to deliver returns for their investors in an honest and honourable fashion.

There is other stuff but I've likely bored anyone reading this

Im only tossing up whether to delve into triumph rates, and leverage in hedge funds etc, since they're very very different to what I see on this forum.

I believe I shall leave that stuff actually like I will probably get called all kinds of rude names that will shatter my life forever.

So, did I seem like I knew what I was talking about?
I could likely bluff my way through replying other hedge fund sort question if anyone has any