i mentioned SAC the other day, this article says hedgies cant be in cash for too long, which resonates with what I said the other day: will clients really fork over 2/20 forsitting on cash??? I thought the name of the game was absolute returns. correct me if I am wrong http://www.clusterstock.com/2008/10/the-death-knell-of-merger-arbitrage- interesting on Perry Capital: negative skewness finally caught up w/them
What else are you going to do, pull your own cash out assuming you have Monthly or Quarterly or Annual liquidity with enough time left to redeem and that you are not in a Hard or Soft lock. Plus it sucks too if they invoke a Gate or if they suspend redemptions. As long as I’m confident with what the manager is doing then I’m ok with them sitting this out until they are ready to strike…
Many HFs have got the notice from clients for redemption by the end of this year. This 1.9 trillion industry is going to shrink.
I wouldn’t use the term “Many” as there are a lot that are 60 or 45 day notice periods so we won’t know until closer to Beg and Mid November…
are “absolute return vehicles” that lose 30% going to be very popular? will endowments want to pay 2/20 or much much worse?? i think a giant reassessment of hedge funds is coming… people thought huge % of smaller funds would disappear and then money would flow to huge players. but now alot of huge players have problems. and i’m just wondering if people will pull money from funds that made the right call on this sub-prime. basically sell them before they have trouble from something else (probably own a ton of shares that are getting killed)… i think a MONUMENTAL reassessment of hedge funds is coming… probably a guy like jim simons will still thrive (and i’m sure there are many others… but i’d say way more than 50% disappear)
In market environments like we are experiencing its very, very difficult to be ont he positive side of the income stmt even for HFs. But being down say 10% YTD is much better than down 40%… The closing of smaller and some larger HFs is only going to make the HFs more appealing as their will be less competition in popular trades which will only increase profits and thus performance. I think for those HFs that do survive there is going to be a great opportunity to shine!
didnt you hear? down 20 is the new flat!
we like to say: down 20 is out-performance. alpha generation!
There might be more regulations for HF industry in future. Fees will be revised too. In the good mkt, HF (Long fund only) doesn’t beat the mkt but just provide good diversification.
cfaboston28 Wrote: ------------------------------------------------------- > There might be more regulations for HF industry in > future. They keep talking about this, but the regs they have come up with are toothless, meaningless, and useless. > Fees will be revised too. > Not if people are willing to pay 2/20. > In the good mkt, HF (Long fund only) doesn’t beat > the mkt but just provide good diversification. Long only equity hedge funds are stupid.
^ lol
lol? Do you disagree?
I always agree with you, JDV. I guess there is no one on AF who doesn’t agree with you. Long only HF will give you return less than the market and will charge you the higher fees. It is stupidity. HF industry is going to shrink for sure: http://www.clusterstock.com/2008/10/john-mack-30-of-hedge-funds-may-disappear-lower-leverage-means-fewer-jobs
No question the hedge fund industry will shrink - it’s happening all around here.
No question the hedge fund industry will shrink - it’s happening all around here.