Top Hedge Fund Investors: Stories, Strategies, and Advice

CHAPTER 13

The Quality of the People

A Review and Preview

 

 

 

Hedge funds began to rebound during the same period that we interviewed the talented hedge fund investors profiled in Part Two. As the year progressed, hedge fund performance indexes approached record-breaking heights and assets flowed back. Some predictions the subjects made had come true or were coming true. Even so, industry participants continued to experience and struggle with the consequences of the financial crisis.

If it is true that you are never a superstar until you make a comeback, then hedge funds made a perverse comeback in late 2009 when Raj Rajaratnam, the founder of the $3 billion Galleon Group hedge fund, was indicted for insider trading. When a different scandal has captured your attention, then you truly have moved on. Or the government has decided to divert your attention from its previous colossal missteps. Future top hedge fund investors will consider those issues.

This chapter reports on the postcrisis period when we profiled these top hedge fund investors and uses their insights, ideas, and advice to comment on developments and highlight important lessons.

HEDGE FUND RECOVERY

Christopher Fawcett from Fauchier Partners said, “I’m an optimist on the industry. I was never as pessimistic as the market in the fall of 2008. I stuck my neck out with journalists and said there would be inflows in 2009. I thought I needed to see a shrink; it sounded outlandish. By first quarter, it sounded plausible; ...