The truth is that most people can not generate alpha or have an edge. Even if you are a successful managing partner for Goldman Sachs doesn't mean you can outperform the market and run a successful fund. You may have the connections and a nice resume to get the capital, but then what? That is why the HF and CTA industry is littered by corpses. These hotshot investment bankers think they know what they are doing, but the majority do not and will fail miserably to close their HF funds sooner or later.
They aren't in it for the glory. They know the rules of the game - you need to make the correct moves to attract significant capital, after that nothing matters as you've a fortune from the fees. They're psychopathic in that they know what people want to see and they are masters in pretending, giving them what they want to see. I doubt they care much about the alpha nor think about it very much. It's salesmen vs. traders, 2 very different worlds.
They have to care a bit.. otherwise with crashing and burn I doubt they will make much of fees... in this case blowout before 1 year, not sure he will be able to collect his management fees... (if yes, 2%x100M=2mil... still not a bad year for the average Joe; but career and CV done)
hahahahahaha Reading the letter of his being sorry, I simply could not help laughing. I am sure that as someone pointed out in few years time, investors will be flocking to him to give him a fresh start : he knows how to open people's bank accounts, and human nature does not change.
Well, he can send a follow up letter : " Due to unforeseen circumstances we have been unable to withold our management fees, please send us a check asap "
At Galleon he was a trader IE he was supervised by the Risk manager and had a trading limit whereas at Canarise he was the boss didn't have to listen to anyone however, I am not sure if he traded at all...
Besides having an edge and risk management, trading is a game where personal psychology matters a lot. I doubt Owen Li can pull a John Meriwether. More likely, he will have to change careers to a completely different field. http://blogs.reuters.com/felix-salmon/2009/10/22/when-failed-genius-is-rewarded/ http://en.wikipedia.org/wiki/JWM_Partners
With Only $200K Left, Canarsie Hedge Fund Unwinds Formed by the former head of risk at Morgan Stanley, the fund lost nearly all of its $60 million in less than a month. Traders Magazine Online News, January 23, 2015 Phil Albinus Well, that was fast. The Wall Street Journal reports that a hedge fund run by a former head of risk for Morgan Stanley and a 28-year old trader from Galleon Fund Management lost all but $200,000 of its $60 million assets in three weeks. Yes, less than a month. In the annals of hedge fund flameouts, this has to be a record. According to the Journal, Canarsie Capital imploded in less than a month but the reasons are unclear. In a letter to investors - one of whom included Richard Axelrod of Moore Capital Management - Canarsie fund manager Kenneth deRegt wrote expressing, “sorrow and deep regret for engaging in a series of transactions over the last several weeks that have resulted in the loss of all but two hundred thousand dollars.” According to the letter, Owen Li, the former trader at Galleon, has stepped down and deRegt will oversee the unwinding of the Canarsie fund. Later in the letter, the former Morgan Stanley head of risk wrote, “I acted overzealously.” One gem from the WSJ article includes a warning from deRegt’s former employer: “In March, Morgan Stanley, Carnarsie’s sole prime broker, executing and financing the fund’s trades, told the fund it was uncomfortable with its risk practices, people close to the situation say. Canarsie at the time hired an independent consultant to look into Morgan Stanley’s concerns, one person familiar with the firm said.”
:eek::eek::eek::eek::eek::eek::eek::eek::eek::eek: Man they burned it in less than a MONTH!!!!! "overzealously" : aka trader full of euphoria. LOL