| Topic Name: |
Hedge Fund-Dot coms of the 21st Century |
| Message Name: |
some traction but not total |
| Date Posted: |
01/31/2002 |
| In Reply To: |
You have never started or run a hedge fund management company. The other two posters have good points. If you start your business and after a couple of years you are still sitting at 10 million AUM, you aren't going to get rich. It takes a lot of staying power to get to the size where it makes sense as a business. Many, many, many people throw in the towel before then, if your believing your own bullshit and sub-par (or a big flameout) don't take you down before then.
The analogy between hedge funds and dot coms has some traction. Just like most dot coms blew up, most hedge funds either blow up, get shut down or wound down. The survivors are few and far between, and the true success stories even less. It is a hard business. Take it from someone who's been there and back. Did I make money at it? Yes, plenty. Did I make as much as I firmly believed I was going to make before I started? Not even close. It barely covered my opportunity cost, at much greater personal sacrifice.
Cheers,
Yabai |
| Message: |
The debate will always go back and forth, no?
It is absolutely one of the hardest businesses out there. Not only do you have to significantly outperform these insane capital markets (as EMT teaches, which should be highly unlikely, not that we believe EMT), but you also have to be able to market a product which you are legally banned from advertising in any way.
However, there obviously is a pretty significant market need for instruments that do more than go long a few hundred large-cap companies (which is what the mutual fund business has really devolved into, often just pseudo-indexing). The rewards for doing well are relatively outsized, but going into the biz without the right experience, education, contacts and backing is quite foolish, as we'll both agree, I think.
How is the buyout biz going? How did that deal we were talking about last year go?
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