Hedge funds are not dead yet

The news last week that legendary trader Steve Cohen is working on launching a massive new fund is not only welcome but long expected. Cohen is clearly one of the sharpest tools in the shed when it comes to managing money. He’s able to provide investors with exactly what they are looking for — true alpha generation. It looks like a potential match made in heaven for both manager and potential investors and it sends a clear message to the investment management world that the demise of the hedge fund industry has been clearly overstated.

It is very simple – investors need managers who zig when the markets zag. I know, I know, this has been the rallying cry of hedge fund managers for years, but many can’t deliver on this simple promise. Their funds are closing in droves and have sparked all the news reports on how the hedge fund industry is dying. Well, it isn’t. Hedge funds are here to stay.

Investors are willing to pay for performance. The mutual fund industry doesn’t understand this simple fact and the popular press has ignored it, but it’s something that smart people understand well. While it is too early to tell how Mr. Cohen will do, the smart money clearly believes in him and his ability. Click here to read about the epic launch.

In other news, I’m pleased to tell you that OFA is coming to New York City later this year. Once again, the brightest minds will gather in the Big Apple to discuss all things in compliance and operations. This event is focused on educating institutional investors on what to look for when evaluating a fund. There is no speed dating here. We leave that to others. Stay tuned the new site will be up soon – learn more now by clicking here.

Things that drive me crazy

I am sick and tired of people being afraid of the competition. It seems that at every industry event I go to, there is a real fear of the competition. Whether it is a conference or a cocktail party, people are afraid to engage their competition. Some folks are so afraid that they ban firms like theirs from attending so-called industry events. How can it be an industry event if only one law firm is allowed to attend, one administrator is allowed to attend or just one prime broker is allowed to attend? This is really crazy. If they’re so afraid of being in the same room as the competition, they should get out of the business. People seem to have forgotten Mr. Corleone’s advice: “Keep your friends close and your enemies closer.” It’s not smart to ignore the Don.