No. of Recommendations: 10
Thanks very much, I was curious about how you ran your fund. Sure you don't want to re-open it? :)
Your fees were definitely more favorable to the customer.
Those were the fees for private client managed portfolios. I also had a 2-and-20 registered hedge fund. (it was about the last stretch a small fund could get away with that!)
I'm assuming that you were, indeed, able to "beat the market" while you were running the fund.
One client lost a fair percentage of his money in my hedge fund. I started the fund shortly before the credit crunch, so a full redemption request around the middle of 2009 will do that. But otherwise folks made money. Returns were not always market beating, but that's not what all clients wanted: some folks prefer the trade-off of a narrower range of outcomes. There are lots of folks would be very happy with (random example) 11% net of fees, plus or minus 8% in any given year.
I definitely won't do that business again, as I learned that it is a *terrible* way to make money. It's all about sales to get more AUM, almost nothing about the quality of the investment management. It's also spectacularly stressful if you actually care about how the clients are doing. And don't even get me started on the useless regulatory paperwork or overpriced service providers.
Jim
