The Future of Hedge Fund Investing: A Regulatory and Structural Solution for a Fallen Industry

Introduction

 

 

 

 

Over the past 10 years I have been directly involved with the hedge fund industry, first running my own hedge fund, Predator Capital, and then working at other hedge funds. I saw firsthand the boom years of the hedge fund industry from 2003 to 2007 and the big bust of 2008. As I ran my own hedge fund, I conducted several meetings with investors, some high net worth investors but mostly funds of hedge funds, and was able to look at their due diligence process firsthand. I also realized that the funds of funds are an extremely important conduit in the flow of money from the end investors to the hedge fund managers. The end investors rely very heavily on the expertise of the funds of funds in selecting hedge fund managers who can best provide the investment returns. It did not take me long to realize that neither the high net worth investor nor the funds of funds have the necessary skilled professionals who can understand and therefore perform the necessary due diligence to manage hedge fund investments. In fact, a lot of the scams could have been detected at a much earlier stage if the hedge fund investors had the necessary skills.

My sincere hope is that anybody who has invested in hedge funds, is planning on investing in hedge funds, or is just plain curious about traders and hedge funds, will read this book. This book is an insider’s critical look at the hedge fund industry. I am not writing this book to extol on the genius of the hedge fund industry or its mavens. ...