Read what I said - I said I wouldn't risk MY PERSONAL CAPITAL in the market. Yes, I can build models and trade the market, but would I put my personal capital into it - like your friend, too much emotional stake; with clients I have no worries - I"m a very risk-adverse individual. Oh well, believe it or not, I don't really care. I'm not here to swag my penis around going 'look at me! look at me!'. Lol.
it's obvious there are many managers who feel this way (with good reason). pay 2/20 for an underachieving index? Sure, why not...
I can understand why don't want to TRADE your own money, but what about Long term investing in the market like an Index fund or a ETF. Where do you invest your retirement money? Thanks Mac
"5/50" or "5 and 50" means that they take 5% of the assets under management and 50% of the profits. As far as I know, most hedge funds charge 2 and 20.
The term "hedge fund" doesn't describe what a fund is, only what it is not : It's not compliant with the Investment Act of 1940. Outside of that Act, if you deal with securities you are a "hedge fund". So you can go long, short, buy baseball cards or golf courses, yen or zimbabwe dollars. What you cannot do is solicit for funds, advertise or get Little Guys to be your investors. The 1940 Act is the deal you strike with the US Government : you get the right to solicit anyone, Big or Small, advertise and sell subscriptions. In exchange, you agree to comply to a whole slew of rules, which basically make you disclose a lot of what you do in the public domain and obey reporting requirements to keep that disclosure fresh. You also obey a bunch of rules that tell you what you can and cannot do in your investment account. Baseball cards, I think, are out. That's it.