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Old 09-02-2014, 11:19 AM   #1
hedgefundguy
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Hedge Fund Manager welcomes your questions

I am working on a new book about hedge funds and would welcome intelligent questions to help me build materials for my book. David Sklansky suggested I do this and I am taking his sage advice.

Fire away!
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Old 09-02-2014, 11:38 AM   #2
DickFuld
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Re: Hedge Fund Manager welcomes your questions

What is the approximate AUM of your fund? Is your fund multi-strategy, and which products does it focus on? What was the worst investment decision you've ever made and how did you learn from it?
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Old 09-02-2014, 12:19 PM   #3
chezlaw
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Re: Hedge Fund Manager welcomes your questions

How reasonable are the fees if considered in an unbiased way? or put another way.

To make the long term net expected return from a hedge fund = the long term net expected return from an index fund then how big should the fees be?


out of interest does DS knows you reasonably well or did he say come here after minimal interaction on the forums or similar?
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Old 09-02-2014, 03:09 PM   #4
Doc T River
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Re: Hedge Fund Manager welcomes your questions

What do you consider intelligent questions and what is the exact focus of your book?
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Old 09-02-2014, 03:20 PM   #5
Mat Sklansky
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Re: Hedge Fund Manager welcomes your questions

Quote:
Originally Posted by chezlaw View Post
How reasonable are the fees if considered in an unbiased way? or put another way.

To make the long term net expected return from a hedge fund = the long term net expected return from an index fund then how big should the fees be?


out of interest does DS knows you reasonably well or did he say come here after minimal interaction on the forums or similar?
David knows him and will be participating in this thread later tonight.
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Old 09-02-2014, 03:57 PM   #6
scrolls
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Re: Hedge Fund Manager welcomes your questions

What % of your net worth is invested in your fund?
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Old 09-02-2014, 04:09 PM   #7
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Re: Hedge Fund Manager welcomes your questions

How do you raise money in the first place to start your fund?
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Old 09-02-2014, 05:04 PM   #8
hedgefundguy
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Re: Hedge Fund Manager welcomes your questions

Quote:
Originally Posted by DickFuld View Post
What is the approximate AUM of your fund? Is your fund multi-strategy, and which products does it focus on? What was the worst investment decision you've ever made and how did you learn from it?
10bb +
multi-strat
value biased in bonds and equities

worst investment decision...will give this some additional thought. Certainly no shortage of bad ones ex-post (and a decent number of bad ones ex-ante upon reflection)
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Old 09-02-2014, 05:12 PM   #9
hedgefundguy
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Re: Hedge Fund Manager welcomes your questions

Quote:
Originally Posted by chezlaw View Post
How reasonable are the fees if considered in an unbiased way? or put another way.

To make the long term net expected return from a hedge fund = the long term net expected return from an index fund then how big should the fees be?


out of interest does DS knows you reasonably well or did he say come here after minimal interaction on the forums or similar?
The fee question is a great one and one that will require more time than I have now to give a thoughtful reply...I have plenty of thoughts but will have to get back to you (soon I hope)

I have been a long fan of DS's works (reformed poker player) and I recently had the pleasure of meeting him and he suggested I post here
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Old 09-02-2014, 05:16 PM   #10
hedgefundguy
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Re: Hedge Fund Manager welcomes your questions

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How do you raise money in the first place to start your fund?
I joined an existing fund and helped it grow, so was not part of the initial fund raising but have done my share of marketing and fund raising since I joined.
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Old 09-02-2014, 05:21 PM   #11
hedgefundguy
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Re: Hedge Fund Manager welcomes your questions

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What % of your net worth is invested in your fund?
Over 90%. I will not starve if we went completely bust it is true, but I am fairly strongly committed.
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Old 09-02-2014, 05:25 PM   #12
hedgefundguy
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Re: Hedge Fund Manager welcomes your questions

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What do you consider intelligent questions and what is the exact focus of your book?
Like David, I revel in finding/revealing the counter-intuitive and I believe there are a number of misconceptions about hedge funds that I would like to discuss. Not surprisingly, I will largely argue that hedge have offered value to investors and that they (generally) serve positive societal ends.
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Old 09-02-2014, 06:20 PM   #13
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Re: Hedge Fund Manager welcomes your questions

Quote:
Originally Posted by hedgefundguy View Post
Like David, I revel in finding/revealing the counter-intuitive and I believe there are a number of misconceptions about hedge funds that I would like to discuss. Not surprisingly, I will largely argue that hedge have offered value to investors and that they (generally) serve positive societal ends.
Have you ever hired a Political Intelligence Firm? If so, how accurate were their forecasts compared to the street consensus? Or in other words did they provide +EV information?

Thanks for posting.
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Old 09-02-2014, 06:34 PM   #14
Mason Malmuth
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Re: Hedge Fund Manager welcomes your questions

Hi Everyone:

I also welcome hedgefundguy to our forums. This should be a great opportunity for those of you who have an interest in this area.

Best wishes,
Mason
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Old 09-02-2014, 10:14 PM   #15
DuckU
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Re: Hedge Fund Manager welcomes your questions

Which other Hedge Fund manager do you respect the most/follow?

Also, how many financial analyst do you have working on your fund(s)?

How much money does your fund manage?

What is the name of your fund?

How long have you been managing it?

Where did you work before starting your fund?

For someone without the resources to invest in a hedge fund, what index do you recommend investing in?
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Old 09-02-2014, 10:28 PM   #16
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Re: Hedge Fund Manager welcomes your questions

Why do you want to write a book? Is your employer ok with you writing a book?
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Old 09-02-2014, 10:35 PM   #17
Tien
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Re: Hedge Fund Manager welcomes your questions

Where / how do you go about pitching investors for more capital?

What kind of "sales" material do you go into a pitch with?

Can you describe a typical pitch process in generalized detail?
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Old 09-02-2014, 11:47 PM   #18
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Re: Hedge Fund Manager welcomes your questions

What percentage of Hedge Funds can truly justify their existence? Aren't most just leveraged up gambling dens that use other people's money? Should the brightest minds be encouraged to get involved in Hedge Funds, as it is easily arguable that Hedge Funds add zero to the world, and any other activity that those bright humans could be doing would likely make the world a better place.

On a scale of 1 to 10, how big of a crime is the tax structure that has Hedge Funds and those involved only paying 15 percent? Should the Hedge Fund industry develop a Hall of Shame for those who blow other people's money, then start over as if nothing happened, under a new name, with new people's funds?

How come you never hear of Hedge Funds being involved in any of the historically great investments of all-time, like Exxon, Berkshire Hathaway, etc. If you had a son who was very bright as a young child, which would you be most disappointed in, if he chose it as a career, poker or finance/Hedge Fund?
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Old 09-02-2014, 11:54 PM   #19
David Sklansky
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Re: Hedge Fund Manager welcomes your questions

Quote:
Originally Posted by dogmoon View Post
What percentage of Hedge Funds can truly justify their existence? Aren't most just leveraged up gambling dens that use other people's money? Should the brightest minds be encouraged to get involved in Hedge Funds, as it is easily arguable that Hedge Funds add zero to the world, and any other activity that those bright humans could be doing would likely make the world a better place.

On a scale of 1 to 10, how big of a crime is the tax structure that has Hedge Funds and those involved only paying 15 percent? Should the Hedge Fund industry develop a Hall of Shame for those who blow other people's money, then start over as if nothing happened, under a new name, with new people's funds?

How come you never hear of Hedge Funds being involved in any of the historically great investments of all-time, like Exxon, Berkshire Hathaway, etc. If you had a son who was very bright as a young child, which would you be most disappointed in, if he chose it as a career, poker or finance/Hedge Fund?
I am going to go out on a limb and predict that even though you might have suspected that these questions might make HFG uncomfortable, they are actually exactly the type of questions he wants to hear and address.
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Old 09-02-2014, 11:56 PM   #20
Doc T River
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Re: Hedge Fund Manager welcomes your questions

What amount of assets (liquid and total) should someone have to invest in a hedge fund?

Is it smart to have so much invested in any one asset as you do?
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Old 09-03-2014, 12:05 AM   #21
DickFuld
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Re: Hedge Fund Manager welcomes your questions

Quote:
Originally Posted by David Sklansky View Post
I am going to go out on a limb and predict that even though you might have suspected that these questions might make HFG uncomfortable, they are actually exactly the type of questions he wants to hear and address.
Was going to post something similar to your response but you beat me to it gosh darnit. I'll post some sort of alternative response instead.

Clearly 'dogmoon' seems to first incorrectly segregate a hedge fund from a mutual fund or any other type of fund that nearly the entirely world uses to place their wealth towards retirement when sarcastically asking how a hedge fund justifies their existence. Furthermore he states that hedge fund managers seemingly blow up, lose everyone's money, and then build some other fund that people pour money into. Feel free to show us some examples of this (since he is in fact wrong.) Lastly, just because his negative bias refuses to accept/read/believe hedge funds make investments that hit it out of the park doesn't mean they aren't doing it regularly.

Also I don't think he quite understands what "hedge" means when used next to the word fund. I'm sure this bull market has him believing hedge funds are worthless as their returns will historically lag one of this magnitude, but they also perform better when **** hits the fan which is what a hedge is supposed to do.
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Old 09-03-2014, 02:34 AM   #22
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Re: Hedge Fund Manager welcomes your questions

Quote:
Originally Posted by DickFuld View Post
Was going to post something similar to your response but you beat me to it gosh darnit. I'll post some sort of alternative response instead.

Clearly 'dogmoon' seems to first incorrectly segregate a hedge fund from a mutual fund or any other type of fund that nearly the entirely world uses to place their wealth towards retirement when sarcastically asking how a hedge fund justifies their existence. Furthermore he states that hedge fund managers seemingly blow up, lose everyone's money, and then build some other fund that people pour money into. Feel free to show us some examples of this (since he is in fact wrong.) Lastly, just because his negative bias refuses to accept/read/believe hedge funds make investments that hit it out of the park doesn't mean they aren't doing it regularly.

Also I don't think he quite understands what "hedge" means when used next to the word fund. I'm sure this bull market has him believing hedge funds are worthless as their returns will historically lag one of this magnitude, but they also perform better when **** hits the fan which is what a hedge is supposed to do.
Actually, most mutual funds, and the people and mindsets involved, are the lowest form of activity in the world. I know investing theory more than 99 percent of people who invest money. I also know the mindset of the "asset gatherers" who add nothing to the world, yet take a percentage of other people's assets, which have been paid for from real world effort and labor.

The lowest of the low are actually the big mutual fund guys, like all-time loser Bill Miller. These so-called value investors are some of the worst investors of all-time. They are almost always fully invested and therefore, will never be able to truly load up at the lows when markets crash. Most, if not all of them, were begging for money during 2008 and 2009. They couldn't buy the bargains, as they had to sell beaten down stocks in order to buy other beaten down stocks. That is why you have heard ZERO stories of any fund or Hedge Fund that was sitting on a ton of cash and then got the money it near the lows.

They will get drubbed soon in this market, too. Chasing yield ALWAYS leads to loss, and there is more chasing for yield right now, by all who invest, then at any time in history.
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Old 09-03-2014, 04:26 AM   #23
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Re: Hedge Fund Manager welcomes your questions

What are some invaluable tools, resources, etc. that anyone can get hold of that help you in your analysis? What are the best books, publications, videos, schooling, etc. to help get someone up to speed on the types of strategies that work? Will your book cover financial spread betting, statistical arbitrage, and other such fun things? Why will your book be better than all the others?
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Old 09-03-2014, 05:39 AM   #24
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Re: Hedge Fund Manager welcomes your questions

Quote:
Originally Posted by DickFuld View Post
Was going to post something similar to your response but you beat me to it gosh darnit. I'll post some sort of alternative response instead...
Quote:
Originally Posted by dogmoon View Post
Actually, most mutual funds, and the people and mindsets involved, are the lowest form of activity in the world. ..
While appreciating the effort put in by you guys I'm here to read some tough Q&A by the OP.
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Old 09-03-2014, 06:48 AM   #25
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Re: Hedge Fund Manager welcomes your questions

why would you keep working in a 10 bil+ fund? the investable universe starts to shrink at that level where some of the best potential investments are too small to matter, and presumably you should have enough money (100mm+) if you joined early enough to retire and manage your family money in a higher expected return manner?

So what drives you? Fame, respect, competitiveness, greed? I dont mean that to come off in an accusatory way, just trying to understand. doesnt seem like fun to me when you cant invest in a 500mm marketcap.
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