The Fundamentals of Hedge Fund Management
$22.98
| Author(s) | |
|---|---|
| Pages |
189 |
| Format |
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| Published Date |
2007 |
The Fundamentals of Hedge Fund Management is revised and updated to address how the credit crisis, legislation, fraud, technology, investor demand, global markets, and the economic landscape have affected the industry.
Author’s Introduction:
This book provides you with some of what you need to be successful. It provides you with the tools you need to make good decisions, the tools you need to create good plans, the tools you need to set out a marketing strategy to help you raise assets, and the tools you need to create an infrastructure that will allow you to support your business.
Your goal in reading this book is to learn as much as you can about how to operate the business side of a hedge fund. This book is not about money management strategies. This book is not about buying low and selling high. It is about the infrastructure, the business side, of the hedge fund industry, and I believe that as you read the following pages, you will learn the fundamentals that you need to run a successful business.
This book will not solve all problems or provide you with everything you need to be successful; it will give you the fundamentals. One thing you should also look for as you go out on your own is a mentor. In order to be successful, you need good, solid advice givers, and you need to be willing to take advice and look for it. Don’t be embarrassed or too proud to ask for help. It is okay to have questions—the key is finding answers.
Contents:
- The Hedge Fund Industry
- The Service Providers
- Hedge Fund Structures
- Hedge Fund Accounting
- ERISA, UBTI, and Offshore Funds
- Marketing and Capital Raising
- Why the Back Office Matters
- The Launch
- Perception versus Reality
The Fundamentals of Hedge Fund Management: How to Successfully Launch and Operate a Hedge Fund By Daniel A. Strachman pdf
28 reviews for The Fundamentals of Hedge Fund Management
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Kyro Cain (verified owner) –
Well written, organized detailed info about what is really involved in managing an hedge fund.
Ariel Deleon (verified owner) –
Teaches you the basics on marketing, accounting and how to best handle those. Informative read for myself who is staring a small hedge fund with no mentors.
Seth Carey (verified owner) –
Exactly what I was looking for to help me decide whether or not to launch a hedge fund. I keep it handy and continue to use it as a reference even though I have read every word. It provides a roadmap for starting a hedgefund with no wasted words. Great book!
Berkley Carter (verified owner) –
This book is fantastic for anyone thinking about launching a hedge fund. It provides a comprehensive blueprint of the formation and launch process; if you read it before meeting with service providers the process will be easier and you’ll have a clearer understanding about where everyone fits into the larger picture.
What is more, DAS’s comments on capital raising are spot on and should be read (multiple times) by every aspiring hedge fund manager so as to avoid being romanced by the “whiskey talk” of every prime broker’s cap into team — who will INcorrectly tell you that all you need is performance…hmmm, don’t think so.
Mavis Velazquez (verified owner) –
I purchased Mr. Strachman’s book for $30 and it was absolutely worth its cost. Providing a detailed overview of how to start a hedge fund, the author conveys a detailed perspective on the industry that only an expert can provide. I have found that many hedge fund books fall short of outlining management strategies, while only discussing investment advice. This book bridges that gap and provides a very down to earth perspective on the management issues behind creating a successful hedge fund. I would recommend this to everyone interested in the hedge fund world; potential investors, entrepreneurs, and the like.
Amoura Poole (verified owner) –
This is the email I sent the author: Hi Daniel, I am currently reading… It is superbly written. When I read to learn, I tend to highlight key points or what I call the “meat”. I find myself highlighting nearly everything. I find it to be succinct, informative, and practically all “meat”. Thank you so much for taking the time to intelligently write such a straight-forward practical guide to launching a hedge fund.
What puts this work over the top is the author’s graciousness in answering any questions I’ve had since reading the book. Great Book, Great Guy!
Marcelo Berger (verified owner) –
Dan Strachman has written THE blueprint for getting started in hedge funds. The guy who gave it one star doesn’t know what he’s missing. No one can TEACH running money. But if you know how, and you have drive, this book will lay the groundwork for getting started. Specifically, back office operations and how to garner assets are explained in detail, but not to the point where it bores the reader. Mr. Strachman specifically tells the readers that this is NOT a book on how to manage money. Or a book on strategy. He does however, give a look into the psyche of the people you want to grab for assets. Who they are, and more importantly, how they think. Once again, excellent read! Hats off. Two thumbs up, etc.
Jimmy Bradshaw (verified owner) –
I have been doing research for a couple months trying to find all the different information to set up a fund and understand its infrastructure. This book has everything you need to clearly understand set up and infrastructure. I literally couldnt put it down,until I read it cover to cover. Hedge Funds and their managers try to keep their trade very secretive and Before I got this book I was suprised how difficult it was to find any info on set up and structure. With the emergence of online trading, you dont have to be a wall streeter to be a fund manager. If I, or you are good at Trading then we should be able to manage funds too. If you’re like me and want to start a fund. Read Strachman’s book first!! Youll be glad you did.
Aziel Duke (verified owner) –
Daniel Strachman takes a difficult subject and makes it accessible. It is very clear his writing stems from real world experience and is not just an exercise in academics. If you want to have a fundamental understanding of the business side of the hedge fund industry, this is an excellent place to start. The asking price of the book is far offset by the value gained in the insights that Strachman shares. I believe Mr. Strachman’s advice has helped to save me from some serious mistakes that would have doomed my fund.
Quincy Stevenson (verified owner) –
Dan Strachman’s book is a true roadmap to understanding the structure of a hedge fund and more importantly how to start one from scratch. Do not let the size of the book fool you. No words are wasted and the author uses a very straight forward appoach to explaining a highly technical business endeavor. I have read a few other books on the topic and this by far gives the clearest presentation of the material. In addition, any questions I still had after reading the book, the author was kind enough to answer directly. The book is well worth the price!
Frank Hendricks (verified owner) –
I’ve worked in finance for almost ten years, as a trader on a desk and at a hedge fund. While I believed that I had a firm handle on how the industry worked, when deciding how to launch my own fund, I discovered that I didn’t know as much about setup as I thought. Strachman’s book offers a well rounded overview of the different aspects of setting up a fund. His approach and writing is neither overtly complicated or watered down. His views on cost, timelines, and mindset are spot on.
Drew Conrad (verified owner) –
This was one book that I thought was very well done and something I would recommend to anyone interested in Hedge Funds. The book gives a step by step guide in regards to launching a Hedge Fund, but also touches on the tax implications/laws behind the startup process as well. Furthermore, aside from the “Bricks and Mortar” portion of starting a Hedge Fund, Strachman also goes into the mental side of successfully running a Hedge Fund- a portion which I found to be very intriguing. I really like how Strachman stresses that having a plan or strategy to run your business is so important. All in all, I found this book to be outstanding and also an excellent reference. I anticipate I will continue to refer to the book when a question or issue arises.
Jovanni Robbins (verified owner) –
Save your money and get a better book on how to start up a business. This book is NOT about Hedge Funds in any depth. It is about the basics in starting a business. WOW, he should write a book on marketing. He got me to pay $23.00 for a “basic” how to start a business book!
Gabrielle Norman (verified owner) –
This book provides a good overview of hedge funds, but not in enough detail to start a fund. If you are doing research to see how funds work, or if being a fund manager is for you, this is a good reference.
Bexley O’Connell (verified owner) –
Good book to understand the overview of Hedge Funds. I was expecting more details on management of it. Good anyway, but need to complement with other more detailed books.
Avery McCarty (verified owner) –
Great introduction into the business aspect of setting up, launching, and running a hedge fund.
Colten King (verified owner) –
This is an exceptional book. I’m a 25-year old investment banking analyst in New York who plans on moving to a fund for several years and then potentially exploring the option of starting my own hedge fund. I’ve been looking for a book that maps out the various logistical steps of how one can do that, and had been surprised that there was nothing out there. This book filled that void, and does a very good job at it. I think there are a lot of people in my situation who know how to invest and think that they can make good returns if given capital, but don’t know where to start in terms of finding capital, setting up the legal structures, etc.
Strachman’s book covers all the fundamentals of starting your own fund, from the types of service providers you’ll need (prime broker, lawyer, accountant, administrator), to the difficulties of the marketing process, to different hedge fund structures, to the sort of qualities you want to look for in an accountant. It’s also all-encompassing – after you read it, you come away with the feeling that you have a handle on all the factors that you’ll need to consider when launching the fund. The checklist is daunting, but manageable. I came away feeling that given the rewards, it’ll be worth a try at some point.
The author’s experience in the business is also particularly helpful. His case studies and commentary throughout the book do a great job in dispelling some of the mistaken beliefs startup funds have. As examples, he makes it clear that a track record is not a substitute for a well-coordinated marketing strategy, picking a good accountant is particularly important, and using well-known service providers is probably worth the extra cost because of the comfort it’ll provide to prospective investors. It’s very apparent that Strachman has seen a fair number of funds succeed and fail, and that experience has allowed him to write a very helpful book to the aspiring fund manager.
Monica Roy (verified owner) –
Having read a number of books on the hedge fund industry, this is the first I found that actually explains the logistics of starting a fund – not only the steps but the costs associated with each. Strachman goes to great lengths to debunk what he calls, at one point, the Kevin Costner myth: “If you build it, they will come.” Too many of us wanna-be hedge fund operators are listening to the corn fields and not figuring out how to raise that first $10 million, which Strachman assures us will be vastly more difficult than we perceive.
Though the book is brief, only 141 pages, it contains chapters on structuring hedge funds, the service providers you will enlist, accounting issues, discussion of back office operations and the all important, marketing and capital raising. Additionally, Strachman discusses the mentality of the sucessful hedge fund manager and asks, with a wink to Nike, ‘Do you have it in you?’ That question, in itself, is worth the price of the book.
Kendra Beil (verified owner) –
This book is the first one that I’ve run into that covers the legal and operation aspects of hedge funds – lawyers, administrators, accountants, and what they all do. It covers a lot of subtle but hugely important topics such as ERISA and new issues regulations, patriot act considerations, master-feeder structures and so forth. These are topics that I’ve not seen elsewhere despite a lot of reading on the sector. There are also a lot of specific companies, names, web addresses, places to go for information, etc. I have been working in London for four years in the hedge fund operations industry, and I did learn some important and useful things that people never tell you.
The book is written a conversationally so it is easy to read, but as a result is somewhat disorganised and mentions new subjects somewhat casually. I would have preferred a more structured approach, where each term is defined with more rigour. Much of the book (perhaps 35%) contains advice about having to deal with being an entrepreneur – finding an office, dealing with assistants – which are hedge-fund startup issues but which are not hedge fund legal/regulatory issues that I was looking for.
The major problem with this book as far as I am concerned is that while the US onshore industry is large, it is still much less than half of the industry. Offshore considerations are covered but more as an afterthought. Corporations, for example are completely left out, and large players such as Citco, the largest hedge fund administrator in the world, is not ever mentioned.
I would also recommend the Handbook of Alternative Assets by Mark Anson, which is sort of the gold standard in the field.
Neil Bravo (verified owner) –
This text is a nice collection of the basic elements required to form a hedge fund. More importantly, it includes some of the more qualitative factors that encourage investors to invest with a particular manager. Unfortunately, there is a great deal of information missing. Specifically, there is no discussion of the specific investment styles different types of investors desire or what exactly they want to see in marketing pitches. The author provides some suggestion of what fund managers should not say to potential investors. This is great. However, the reader gets the sense that the author knows much more than he shares in this book but wants only to provide a carrot to snag clients for his fee-based services.
It is somewhat surprising that Wiley would allow such an expensive [to the reader] piece of advertising material be published under its name. The holes in the book’s content are enormous. While there is solid information scattered throughout, so much is missing. In fact, there is no detailed discussion of fund types (global macro, long/short, event, etc) and investor types (endowments, pension funds, family fund, etc). Also missing, are more detailed descriptions of the documents required – both legal and marketing. A better description of what to look for in a prime broker as well as the fee structure would also be helpful.
Oddly, much of the last fourth of the book is collection of basic reference data such as lists of professional service firms. Hence, the text of book is shorter than the page count suggests. When I reached the end, I was a bit surprised as I was expecting more content in even greater detail. The book will have value to beginning hedge fund manager but to be truly useful, it should contain three times as much information.
Laylah Benjamin (verified owner) –
This book provides for an excellent overview of hedge fund industry. Does not cover specifics, but provides great list of sources where to find certain information.
Stevie Chan (verified owner) –
The book is full of commonsense logic and is very limited on insights of the trade. Significant part is devoted to inspirational stuff that those who embark on setting up the fund may find useful, but otherwise don’t expect to find something unique there. The book is clearly overpriced.
Alora Woodward (verified owner) –
Well organized, and for the material that would normally be difficult to comprehend the author did a stellar job! Highly recommend this text if one is contemplating becoming involved in this field.
Melani Duncan (verified owner) –
Some people have criticized this book on the basis that (1) it doesn’t provide any strategies for managing money; and (2) it de-emphasizes alpha generation for operational aspects.
First, this is a book about MANAGEMENT and the OPERATION of hedge funds. It is not intended to be a book about hedge fund strategies. If you want a book about hedge fund strategies buy one of the many books available on THAT subject. Moreover, if you need a book on what strategies to pursue perhaps you should come up with ideas of your own. If someone has a strategy that works they are not going to give that proprietary knowledge away in a book.
This book is one of the few that offer information and instruction on how to start a fund from the operational point of view. Strachman is quite correct in stressing over and over again that if you build it they will not necessarily come. You can have the best strategy in the world but without assets to manage or a proper marketing strategy you will get no where. Some people have taken this to mean that Strachman is advocating that alpha generation is easy. I don’t think that’s what he’s getting at. Rather I think he’s stressing the often overlooked challenges of starting a fund, not investing assets.
See the TOC for the areas covered in the book. It is not a long book and at times I wish there was even more in depth discussion, but Strachman covers the basics well. This is a good place to start for anyone wanting to get started.
Dani Hurst (verified owner) –
Despite what other people have written about this book, I found this book very very helpful. I am currently only 24 years old and have career in project management so I had no clue on what it took to start a hedge fund.
Compared with most people that start a hedge fund (most worked on Wall Street in one capacity or another) I have only a tiny fraction of money to seed a startup hedge fund. And really, I had no clue how to start a hedge fund prior to reading this book. I only knew how to navigate the financial markets successfully. I was hoping to buy this book and learn all the legal and financial aspects of starting and running a hedge fund. In that sense, I was disappointed (hence the four stars). But it was only a small disappointment and what it lacked in the nuts and bolts of running a fund, it made up with thought provoking insight into what it takes to get a hedge fund off the ground and sustainable. This book will tell you to find a good lawyer and accountant gives you some solid advice on how to find one that will work for you. Most importantly though, it lays out clearly what things need to be done prior to launching.
Since the author doesn’t run his own hedge fund (I believe he is more a consultant to hedge fund managers), the real strength of this book is in how to market your hedge fund. I thought that because I have a strategy that I think will work in the market, that it will be enough to be a successful hedge fund manager. He shot that idea down very quickly and for that it is worth its weight in gold. The focus of this book is on what you need to do to get a hedge fund going and the most important aspect of that is marketing. You can have a great idea for investing in the markets, but without critical mass your hedge fund will fail. In order to gain something from this book, you should already know what strategy you want to implement. If you have that, you will find that this book will help you with the planning and very early stages of a hedge fund. From there it is up to you…
Harlow Merritt (verified owner) –
Doesn’t really give you any specifics about starting a fund. Lots of topics are hit at the surface. A good place to start to create a list of issues and to get an introduction but also felt it was an advertisement for his other services. Samples documents were the biggest help and that was worth the price. Without that, it would have been a 2* or less.
Maverick Schaefer (verified owner) –
This book is the hedge fund equivalent of late night schemers who sell you expensive guides to tell you how to get rich…and then refers you to hire other professionals and to hire his services.
This book has small amounts of useful information (short descriptions of what various service providers do, very basic legal structures, etc) that could be conveyed in 15 pages (not 141 of repetitive, rah rah fluff). It is just a thinly veiled marketing brochure for the author’s other hedge fund “services”.
There isn’t even a proper description of the author’s background or what he’s proposing to sell, other than repeated reference to go to his website or email him about every basic piece of information that should be included in the book in the first place. Given the repetitive fluff in the book, he had plenty of space to include all this basic reference material…why didn’t he???? why did we pay over 50usd to buy this book???
also the author is clearly not a sophisticated investor. he places proper importance to fund raising, but flat out states that generating alpha is very easy…i don’t even know where to begin to mock his attitude. he’s giving you advice in a know-it-all, absolutist fashion as if he’s done it all, but frankly he runs a newsletter, and provides consulting services which no hard core hedge fund investor whose stated goal is to maximize his income would waste their time on.
Get Fabozzi’s Handbook of Alternative Assets instead…much more detailed and useful.
Victoria Manning (verified owner) –
I think this is a great book because it has a lot of useful information and serves as a decent introduction to Hedge Funds, covering all the basics of hedge fund operation, demystifying many things. The book is geared toward people who want to start a hedge fund, but I would also strongly recommend this book to:
– anybody who is working in the hedge fund industry and wants to understand daily operations of hedge fund. This may not cover the nuances of trade settlement, for example, but will explain PB relationships.
– anybody who works for a service provider and wants to understand their clients (hedge funds) – this happens to be the category I fall under.
I thinks the book provides a ton of valuable information. For example, having been in a startup hedge fund, I completely agree with author’s assessment of hedge fund marketers. Also,
This book is definitely DOES NOT cover fund strategies, and how to make money in the market, (the author states this in the very beginning), but provides an overview of setup and operations. It certainly does not go into a ton of detail and explanation of any particular area (for example, if you want to learn how the trading and settlement works, you may want to look at another great book – “After The Trade Is Made” by David M. Weiss), but provides just the right about of information to have awareness of common issues and some suggestions which may save practitioners unnecessary headaches. This of this book as a guide to a startup business (the author draws those parallels as well) – there is no single guide that will cover every little detail, but books like this one describe what things are at play.
The book also cites a lot of sources that make further research easier.
All in all, working for a service provider to the industry, I would love to have this book as a required reading for people who work at my company because it’s a great guide to the industry.
Lastly, I don’t agree with one of the reviews that states that this book is used to tout the author’s services – author often recommends hiring a professional, and/or outsourcing certain functions but that’s the reality of the industry – for a small/startup hedge fund, you can’t get everything done yourself, and there are aspects you really don’t want to mess up.