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Fact Or Fiction: Hedge Funds To Offer New Perks
Hedge Funds Turn to Gimmicky Promotions to Keep Investors as Their Inability to Ever Beat Any Benchmark Becomes Apparent
NEWYORK – With June turning out to be an ugly month across most financial markets, Hedge Funds are once again losing money. The losses come on top of the industry’s already weakening reputation thanks to back to back years of underperforming major benchmarks. To try to keep their investors from leaving, many funds are turning to promotions usually reserved for far less glamorous industries.
Some fund managers are cashing in on their own “Masters of the Universe” mystique by offering investors tours of their trading floors, invitations to golf outings and tickets to watch poker tournaments. As Mark Arlett, manger of the multi-billion dollar River Ridge long/short fund told us “Even though the stock market is still up on the year, our funds are down. To keep my investors excited about the future with our firm, I flew a bunch of them down to Atlantic City to watch me play poker. I placed 2nd in a tournament and took home $50,000.” Asked how this served the interests of his investors, Arlett replied “nothing makes an investor feel more confident in their fund manager than seeing the guy’s ability to make himself richer.”
Others geared their promotions to reflect their fund’s strategy, as explained by Ron Patel of the Value Seekers Fund. “Our investors invest in a value fund because they believe in finding diamonds in the rough. Since our fund has gotten killed with the value stocks we bought near all time highs earlier this year, I decided to offer a promo that makes our fund look more valuable than other hedge funds. So anyone that invested an additional 5 million dollars in the fund gets their fees reduced to 2 and 19, on the last million.”
Famed manager Eddie S. Lambert of the humbly named ESL Investors has tried a more radical approach. Lampert has given his investors a piece of one of the fund’s major holdings, by distributing shares of Autonation. Some critics have questioned why anyone would invest in ESL in the first place, since 90% of its holdings can be replicated by buying just 5 stocks and without paying the hefty fees that have made Lambert a billionaire. We tried posing these questions to Lampert himself, were not able to reach him, as our calls to ESL’s client relations number kept being forwarded to the Sears Layway department.
Stevie Cohen’s troubled SAC Capital Advisors currently has no promotions in place. However, a few of the funds investors told us that last year Cohen had told them he was setting up a an exclusive client newsletter, only to abruptly cancel the idea. The newsletter was to be called the “Information Insiders Edge.”
Not all experts agree that such promos are necessary. Hedge Fund lawyer James Kaplan, from the respected Wall Street law firm of Kaplan, Wolf and Dubois told us that fear of redemptions is no reason to change what you are doing. “If any hedge fund investor actually reads a fund’s subscription document and PPM, they would see that theoretically the fund never has to give anyone their money back. They just have to declare a liquidity crisis and throw up a gate. Nobody ever complains about that language anyway. Honestly, judging by the correlations to the market, the ridiculous fees and the lack of transparency, its not like any sane person would actually invest in a hedge fund for a financial reason anyway.”
Source: Omid Malekan via OmidMalekan.com,
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Such as Hedge trimming or Trim hedging or "happy ending".
The entire financial services industry will soon be a smoking hole in the ground. Jim Rogers is correct... become a farmer. http://tinyurl.com/pp588mj
It is a great fraud. I will make you rediculous amounts of money because I am an expert. Well, of course pay is not dependent upon results. Yeahhhh.
OT.
China Launching Gold Backed Global Currency!http://beforeitsnews.com/alternative/2012/08/china-launching-gold-backed...
Mine just offered me a Spiderman Towell...:-(
I am holding out for the lime green toaster....
"and tickets to watch poker tournaments."
Funny, I thought they already got those for investing with them.
' So anyone that invested an additional 5 million dollars in the fund gets their fees reduced to 2 and 19, on the last million.”
I have been on the fence about giving my family's assets to a hedge fund. I have refused up till now. Incentives like these may be the iimpetus to finally get me to go for it. Bravo Ron Patel, whoever the fuck you are. You finally hit a nerve and may get me to act.
OK MDB give Fonz his log-in ID and password back before someone gets hurt. ;-)
Why not leverage those "good vibes" , mortgage everything you own and invest that too.
I'm in, this really is too good to be true...
I was wondering if he said the previous line with a straight face...
"Since our fund has gotten killed with the value stocks we bought near all time highs earlier this year, I decided to offer a promo that makes our fund look more valuable than other hedge funds."
Translation:
"Look!...lipstick...on a PIG!...and it's SHINY...ooh yeah, SHINY!..."
Fuck around, this butt nugget is in charge of anything?
Do I really need to pay 2 and 20 to buy AAPL?
My money is going into the first fund offering Spider-Man towels.
I'm more old fashioned. I'd settle for a new toaster in return for a $1 MM investment.
I'd be happy with someone calling me sir
I love how it's only 1 point off for the last million, fuck is it me or are people on wall street just lites-out retard
I'd rather give my money to a Nigerian Scammer, I get called Sir, the emails are more believable and the english translation is more honest.
2 & 20 indeed indicate both length of appendage (2inch) and IQ of the smashed crab it eminates from.
Go build something, anything, just stop sucking margin while pretending you know anything. Fucking parisites
epic.
"2 & 20 indeed indicate both length of appendage (2inch) and IQ of the smashed crab it eminates from."
LOL, good one.
Contact me when they're giving away free lap dances and booze @ a full nude strip club
That is for your pension fund manager only, not for you.
your "former pension" fund manager.
In between the debauchery and greed, nobody's minding the store...
but plenty enough are devouring the host, anyway.
If you try to find the least common denominator, it is the part where the leeches have no control over their actions.
If I want to piss my $ away on the Eddie L play I will just buy SHLD.
He should start holding Roman Empire-themed sex orgies in his shuttered Sears and KMart stores for his hedgie clients.
Is this from The Onion?
C'mon ZH, you can do better even on a slow weekend.
ZH prints Hedge Funds finally to agree to do their job and make money instead of throw parties wih other people's money.
The Onion prints Hedge Funds finally to agree to do their job and make money instead of throw parties wih other people's money.
So who prints the title first?
The title is "Fact or Fiction".....
I'm thinking fiction, but then, I'm not a desperate HF manager.
…by gambling in a casino.
F^&*king hilarious on so many levels, unless he’s your fund manager.
Of course, he’s just playing poker with his own money. When he’s gambling with his client’s money, he probably puts it all on 17 and lets it ride.
If it were any other industry, I would say fiction. But this is Wall Street, where arrogance and hubris are nicknames used by two hookers to appeal even more to their clients.
It's just so amazingly unbelievable how bad it's become. We're all here brother watching it burn and shaking our heads.
Have to give you a green down here, that old no votes if you started with quotes thingy.
Search images for that ahole's name/fund and here's one of the photos that comes up: http://www.allbreedsblog.com/wp-content/uploads/2011/09/img_1758.jpg
free towels!!
Pimco Total Return fund was off 3 percent.
Oh so how do you like the ChairSatan now--Suckers.
meanwhile gold is down 40% "and Bill Gross is a total idiot." silver even better! at least it answers the "performance question" i was always chewing over when Kudlow and Co open their mouths. TAKE IT OFF BITCHEZ! PLANET EARTH IS WATCHING! http://www.youtube.com/watch?v=ynfk7izWNE8
I love all these articles bashing hedge funds that always neglect all the hedge funds out there that have had excellent long term total returns that crush the market by a landslide. It's akin to saying "Because this bunch of stocks has performed poorly, investing in stocks is a waste" - something that completely ignores all the equities people could have made a substantial profit on if they were invested correctly. Selecting a hedge fund is no different. If you think swaths of wealthy people are just giving away their money to get screwed you're a total jackass. Reminds me of the clown PhD professors in business school who "taught" that you can't beat the market, throw all your money in SPY and leave it; kind of insulting while pursuing a finance degree, but what do you expect when you're being taught by people who are teaching specifically because they sucked at real world finance. People that write articles like this must sleep tight holding on to their liberal arts degree.
always good to hear from the equity bugs too. "selling the same line of shit for forty years straight." one look at Vanguard says "you missed the boat because no one ever told you what a boat was." i'll leave aside "what the Fed is suddenly doing at present" and let's you chew on imagery: http://www.youtube.com/watch?v=k26hmRbDQFw
Yeah, I'm an equity bug for stating an obvious fact you didn't even address. How is finding undervalued companies to be long and overvalued companies to be short in order to profit make me an "equity bug"? I know this may make your head explode, but I actually do own gold/silver and I still invest long/short in equities. My current employer is a long/short fund with a speciality; if you think that I or the people I work with are permabulls who just throw money around you really are clueless. I can't speak about other funds because this is the only one I've worked at thus far, but I'd be willing to bet most successful, long-term funds are similar to us in that regard. Welcome to reality.
hmmmm. this one has been brought in connection with "how right tylers durden have been and always will be" before: http://en.wikipedia.org/wiki/Bridgewater_Associates hmmm. what's this mean?
http://en.wikipedia.org/wiki/Risk_parity obviously anyone complaining about correlations approaching one shouldn't be bothered anymore, right? so "when in doubt go triple long the Vix"? or "do the bad guys see that coming already and so i need to..."? anywho "why can't the the problem of divergence between credit and equity be solved by a massive rally in credit?" i mean it's not like issuance can't be "controlled"...and should the Fed basically be forced to step up to the plate...well, obviously this could be construed as quite bullish from a "sustainability point of view." not saying it would work of course. the Fed could be "cramdowned" but the "cramdowners" could still end up getting their correction anyways. i've been told this is how markets work. "they go up...they go down." hmmmm. sounds to me like the fewer moving parts the better here. http://www.hbs.edu/faculty/Publication%20Files/10-008.pdf hmmm. "information risk" in the Age of the Internet. can you really fool the algo's? all of them? all the time?
Arlett replied “nothing makes an investor feel more confident in their fund manager than seeing the guy’s ability to make himself richer.”
Fucking stupid moron. Exactly the reason why people ask where are the client's yachts?
Obama in other news has issued orders that everyone must buy government bonds. Asked what the goal of not having a free market said, "Jim, its socialism. We regulate the markets and bureaucratize investment decisions with Dodd Frank. Investors must learn to share the sacrifice." Lehrer continued, "why this focus on the "rich" paying their fair share, aren't you..., Obama: "Jim don't interupt me, everytime I say rich you can replace that word with white, and you'll know where I'm coming from."
Hiliary Clinton on the other hand was testifying before Congress when asked whether she was lying about Libya and youtube video being the cause of the uproah on 9/11 before the election in 2012, she responded "Prism and the NSA may show we we're absolutely lying, but what difference does it make? We're controlling the media, no one will hear this." Later when leaving the Congressional hearing, when asked whether she would run for president in 2016 said, well if Bill is alive still I'll do it. But I'm just a placeholder for Bill to come back into Office. I still want healthcare reform, we need a single payer system. Otherwise my debts were paid down, I owe people some money and political office is a great way to pay them back."
In other news Russ Tice appeared before Congression to talk of the NSA's watching everyone. When asked which Supreme Court Justice was being blackmailed, "Roberts you idiot... didn't you see his Obamacare decision flip? They got him, he's got a child with one of his staff and some perverted sex addiction." When asked what the NSA had planned for next, "Well, they have this idea for a two way TV in your house which watches you and can "influence you" and this internet search engine which autocorrects your searches, if you type in "freedom" it corrects your spelling to "fiefdom". If you type in "gun ownership", it corrects you, "mental illness help".
....ITS ALL FICTION?
"tickets to watch poker tournaments."
Isn't that essentially what a fund is except they are gambling with your money. What a bunch a of sick bastards if they offer what they do as perk on top of doing it.