CNBC's Ron Insana closing his Fund of Hedge Funds

Discussion in 'Wall St. News' started by makloda, Aug 19, 2008.

  1. If Insana had been willing to "do the work" and study Jack Hershey's methods, this may have had a completely different outcome :p
     
    #41     Aug 21, 2008
  2. Once again you show yourself to be a total FOOL, with no clue about the hedge-fund business.

    If you think that SAC will answer the phone for anything under several million, you are sadly mistaken.
    Even former employees are barred from discussing the firm because they have had to sign confidentiality agreements!

    No go run along.
    I hear that your Mommy is calling you in for dinner.
     
    #42     Aug 21, 2008
  3. If being charged double fees but getting all of the downside of an uncertain outcome gives you absolutely no pause, then who am I to argue with the Perrenial Optimist Blue Sky Society?
     
    #43     Aug 21, 2008
  4. Thank You for pointing out what others on this thread have been unable to comprehend.
    Now feel free to give ThunderDog a basic lesson in Risk Management and Diversification 101A.

    :)
     
    #44     Aug 21, 2008
  5. You fail to understand that sufficient diversification is of importance when investing in hedge funds. Many funds have a minimum investment of $250,000 - $500,000 or even up to $1m, or they're even closed to new money.

    Let's assume you were one of those extremely intelligent, ultra high net worth, sophisticated people and let's assume you wanted to invest $2.5m of your money into hedge funds. You could get exposure to 5 funds @ 500k each, be relatively undiversified with the risk of a single blowup costing you 20% of your investment.

    Or you invest 2x1.25m of your money into 2 different funds of funds with each giving you exposure to anywhere between 50-100 funds in exchange for the additional cost layer of 1+10% as the funds of funds do all the work and paperwork trading in and out of the underlying funds. It also means you have to go through the compliance process (source of your funds etc.) and paperwork only twice, instead of 30 times, if you wanted to invest with 30 funds directly.
     
    #45     Aug 21, 2008
  6. I think that an additional 1.5% of capital and 20% of performance is a high price to pay for Rolodex diversification by a media personality. And it's usually when people don't give a shit about ridiculous costs because things are so good that trouble is often just around the corner. Surely you can muster up a few historic (and recent) examples of that, eh?
     
    #46     Aug 21, 2008
  7. 1.5 + 20% is certainly on the high side for a FoF, I agree. 1 + 10% is probably more of a standard.
     
    #47     Aug 21, 2008
  8. You'd best take that up with Landis82:
     
    #48     Aug 21, 2008
  9. SAC Capital Advisors, Renaissance Technologies Corp., Perry Corp. Third Point, Omega Advisors and Icahn Management


    Those are all really great hf's.

    Almost like you can't fail...
     
    #49     Aug 21, 2008
  10. Do the math yourself if you don't believe it, prove me wrong.
     
    #50     Aug 21, 2008