In today's WSJ. I subscribe to the print, maybe one of you guys who have the digital edition can paste it here. They say they are losing four partners and cutting staff down to 25 employees from 35. The Relative Value Opportunity Portfolio is down 42.78% to the end of November with a net asset value of $554.8M. I wonder at what point to investors say "no more" for a particular hedge fund manager. It seems as if they don't care about a fund manager's performance, they care about his education or a brand name built by long ago good performance.
Before it crashed it was. Niederhoffer was good perfomance. Before he crashed. Richard Dennis was good perfromance. Before he shut down, three times now. Any one of these people could go hat in hand to investors and raise billions based on THAT past performance because that's all investors choose to look at. All of these fund managers are even rabidly defended as the best of the best by some of the chatters here on this board too. They, like the investors, see what they want to see, ignore what they want to ignore. The fact of the matter is that Meriwether, Niederhoffer and Dennis are no different than the Silicon Valley IT manager who quit his job in 1999 to daytrade stocks in an Ameritrade account. The end result was the same - the loss of almost all the money.
Just search 'Meriwether Hedge Fund to Cut Staff' on Google News, and click the link that comes up for the full article.
The financial industry is consolidating or becoming more efficient or evolving. it's just more efficient to have fewer hedge funds in the industry. there isn't enough business to suppor t so many funds. some funds were selling funds etc. hedge fund and financial industry over expanded in the last 10 years. There are more daytraders and hedge fund managers than ever before.