Hedge funds are clearly the evil that men and women do that live on and on. It is clear from recent reports in the media, comments from both sets of Presidential candidates, comments from the new Speaker of the House, comments from other members of the House and Senate, and comments even from an old friend from New Jersey who visited this weekend.
Hey, I think it’s great. The venom that has been spewed about the global hedge fund industry really tells me one big thing: Hedge fund managers are getting something right. Sure, people attack what they don’t understand, but they especially attack what they can’t even begin to comprehend. Hey, these hedge fund managers surely must be doing something wrong if they’re making so much money.
On the other hand, remember that the market dictates fees and hedge fund managers get paid only if they do well. Is there an investment advisor or stockbroker (not sure if they still call themselves that any more) who is willing to say “if I don’t perform, I won’t charge you a fee”? I know there are rules against this sort of behavior, but perhaps those rules need to be changed.
Ask a mutual fund manager about the difference between an asset gatherer and an asset manager and then ask which one they are. The conversation will end abruptly. Most mutual fund managers are closet indexers, they manage for the mean and work on gathering assets rather than managing them because they get paid on the amount of assets under management. The difference between hedge fund managers and mutual fund managers is simple: One gets paid to make money for the client, the other gets paid to manage for mediocrity.
I bet you can guess which one I would choose.
Operations for Alternatives is shaping up nicely. The program is really coming together and once again OFA will be the single largest gathering of operations professionals in the United States. If you have not yet signed up or need to learn more go to www.ofa-america.com. The event is being held Februrary 1 and 2, 2016, at Miami Beach’s fabulous Fontainebleau. Don’t miss it.
THINGS THAT DRIVE ME CRAZY
Many of you have heard me comment on how happy I am that Steve Jobs created the IPhone and IPad. Both tools have made my life easier. I, like most people who use a smart phone or tablet, am able to be more efficient with my time and more productive in my business. Still, there is one use that needs to be addressed. Recently I was waiting in line at a LaGuardia Airport restroom and noticed a number of guys checking their messages while standing at the urinal. This, gentlemen and, yes, ladies has got to stop. While I’m all for using time wisely, this is not a good use of it. I think the time has come to stop texting and cellphoning at urinals everywhere!