Hedge Fund Implodes
Tuesday, 4 March 2008
"One of London's most successful hedge funds imploded yesterday"…. says the FT Friday 29 February
I am fascinated by the news of this and other failures, yet there is an appetite from investors to keep investing into hedge funds. We have mentioned in a previous post ...click here...the FSA were thinking of opening up hedge funds to retail investors…so why do investors remain invested or even consider investing into hedge funds?
Well if you know the risks and can afford to lose your capital, and you do, you cannot complain. Yet I wonder if investors actually do understand the risks they are taking?
I have said in the past, if you can find a manager who can consistently outperform the market average, then you will make money. This is because over time the market tends to slant upwards...(but not on a consistent basis). However, are these managers freely available to most investors?
If your wealth is say up to £25m, then are you really going to find a fund manager that works for you and beats the market? Any manager worth his/her salt, will be employed by the ultra high net worth investors…or large institutional funds…so for most of us, its better to remember to diversify your holdings, keep asset allocation as your strategy, keep turnover low to avoid costs…and capture as much of the market return that is possible. Perhaps then you will then have a successful investment experience over time.
But if you do find that superstar manager, let me know, I might have some more money for them to manage!
Categories: Hedge Funds, Asset Class Management, Diversification
posted by Murray Round Wealth Management @ 00:40,
The Authors
Nicholas Round
Nic is the Managing Director of Murray Round Wealth Management Limited, who seeks to ensure the advice provided is truly independent. Based in Shropshire with clients local, national and worldwide, Nic has strived to find the best possible service for his clients needs, by researching and studying the market, trends and philosophies. Nic strongly believes Asset Class Management will bring his clients Financial Freedom, Independence and Happiness.
Kirsty
Kirsty is our communication guru. Managing information requires considerable due diligence and her passion for organisation gives the clarity we all seek. From Shropshire, with a Psychology Degree and much travelling, she is now back in Shrewsbury...and London often, keeping us all at Murray Round focused.
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