The Long and Short Of Hedge Funds: A Complete Guide to Hedge Fund Evaluation and Investing
The Long and Short of Hedge Funds presents readers with a unique look at these investment vehicles, the people who run them, and those who provide services to them. This book is a detailed guide of the industry and offers rare access to hedge fund managers and industry participants. The book provides the reader with a real education about hedge funds, gaining a firm understanding of the industry.
Hedge funds’ dirty little secret is that investors use them to stay wealthy, not to get wealthy. That’s the story that the press has missed, and that investors and the general public don’t really understand. Uneducated people who think that hedge fund managers are all about taking as much risk as possible in order to make outsized returns are simply wrong.
Hedge fund managers make sophisticated, calculated, risk-evaluated trades in an effort to make money regardless of which way the market is going. This fact alone has led some of the most sophisticated investors to use hedge funds. It is why all the major Wall Street firms and some of the minors are looking for an entry into the hedge fund industry. They’re the future of Wall Street, and it’s a glorious time to be getting into the business, either as a manager or an investor.
As the market continues to evolve over the next 5 to 10 years, I expect the lines between mutual funds and hedge funds will continue to blur. I believe there will always be a place for traditional long-only managers who operate mutual funds. Those same managers will lobby Congress to change the laws that govern mutual funds—in particular the Securities Act of 1940—and the mutual fund industry will evolve into the hedge fund industry.
This means that before we know it, there will no longer be “mutual funds” and “hedge funds”—there will only be investment vehicles. There will be products for investors that will go long, products that will go short, and some that go both long and short, all covered under the Securities Act of 1940. It may take 10 years, but it is coming. This, dear reader, is where the investment management business is heading, and you need to make sure that you’re pointed in the right direction.
That’s the purpose of this book, to serve as a roadmap to understanding how hedge funds operate, how they raise money, and how they grow from an idea in somebody’s head into a living, breathing entity that manages assets for investors. Along the way, this guide should provide you with ideas on how to take advantage of opportunities in the marketplace, particularly those related to the evolution, creation, and development of a hedge fund organization.
- Hedge Funds Past, Present, and Future
- Hedge Funds Today
- The Men Who Made the Industry What It Is Today
- Running Your Fund Transparently
- How Hedge Funds are Packaged
- How to Raise Money
- The Supporting Staff
- Fraud, Collapse, and the Kitchen Sink
- A Few Parting Thoughts