I have been fairly fascinated by hedge funds for quite some time. I began studying them earlier last decade. It has been an intriguing field for investigation for a number of reasons:

1) Alpha Generators: In the early days of hedge funds, they created a ton of Alpha. Like pre-expansion sports leagues, there was a limited number of talented managers, and most were superstars.

2) Brilliant Characters: The managers of some better-known funds are brilliant and insightful investors. Their Alpha generation suggests as much. But they are also characters in the fullest sense of that word: Quirky, charismatic, compelling, mercurial. Once you become fabulously wealthy, you follow a different set of rules from the rest of us.

3) Contradiction Between Performance and AUM: Over the past decade, that elusive Alpha has gone away as AUM has ramped up to all time highs.

I was reminded of this when I saw this headline yesterday: Hedge Fund AUM Hits Another Record High In Q1 2014.

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Category: Hedge Funds, Investing

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

5 Responses to “Why Has Hedge Fund AUM Hit New Record Highs?”

  1. DeDude says:

    Yes pension fund managers double down in a desperate attempt to get the kind of investment return that they need to fulfill the promises to the workers. It is a sad sight seeing how managers of these over-expensive under-performing hedge funds harvest hard working peoples retirement funds. And it is all legal because the same 1%’ers bribed our politicians to make it so.

  2. JustTheSame says:

    Boy I just read through your discloser and realize that you’ve drilled down on 99.9% of internet interlopers and there propensity to garble on. Berry, I’m concerned about the lack of the realization that the Luddites have been proven correct. Yet, no one seems concerned about it. They just go on thinking that more innovation and cheaper labor is the answer. When comes the day that the “lucky” rich (and I mean that knowing that there are a few self-made) realize that it is in there best interest to figure out how to occupy the poor’s or not so poor’s time in fruitful pursuits? We need to figure out an answer before it is too late. No one talks about the lack of job creation anymore…why because they haven’t the answers and they (we) want to wish it away.

  3. VennData says:

    So pension fund managers have some fig leaf to justify their ridiculously overblow pay packages.

    The mob used to run the union pensions. Now the hedge funds have stepped into take the money.

    The people who decide pay for pension managers in the modern world are idiots.

  4. VennData says:

    Don’t be a member of the Hedge Fund Club

    “…2013 was another great year for the global hedge fund industry. Net inflows were almost $64 billion and total assets reaching $2.63 trillion. Unfortunately, investors in hedge funds haven’t fared as well as the purveyors. Thus, we have one of the more puzzling anomalies in finance — the continued growth of an industry that for a long time has delivered miserable results for investors. The first quarter of 2014 didn’t off much of a reprieve…”

    http://www.cbsnews.com/news/dont-be-a-member-of-the-hedge-fund-club/

    Boards of fund who pay salaries of people putting money here are idiots. They will be remembered not as responsible, alabaster-white pillars of their communities who blabber on about risk-adjusted returns, but as morons.

  5. Livermore Shimervore says:

    After making my way through Flash Boys, I’m of the opinion that wealthy investors, on average, are only marginally more educated about Wall Street than the typical 401K/IRA contributor. The difference of course is that HF’s are not allowed sell or take money from one of the two groups. Keeps it tidy. They leave shilling to the worker bees (front-running and all) to the retail brokerages and mutual funds who are running out of excuses as to why hedge fund-like active management (for a fee) isn’t completely retarded for 99.9% of investor.