The Hedge Fund Resource Network your No. 1 source for domestic & offshore fund formation, hedge fund website design, and hedge fund consulting.

Domestic Fund Formation It is a simple process to enter the hedge fund industry; practically anyone with $15k to $20k can start a hedge fund and forming a hedge fund gets easier every year.
Offshore Fund Formation An offshore hedge fund is simply a structure used by hedge fund managers as a way to attract offshore investors (non-U.S. citizens) or U.S. tax-exempt investors such as pension and endowment funds.
Hedge Fund Blog
Hedge fund IPO
Hedge fund IPO? Proper hedge funds deliver because of upside incentives and downside punishments that align managers with client interests. The much criticised “heads I win – tails you lose” compensation scheme is a myth. Investors redeeming for weak performance, low pay if below high water marks and the principals’ wealth in the fund assures clients of SHARED positive and negative outcomes and incentivizes managers to try to minimize losses, unlike the risky passive crowd. Investing in hedge funds is about REPLACING market risk with manager risk. If, like me, you...
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Wealth management
Why are only the wealthy allowed to invest with top money managers? Ancient laws make managers not skilled enough to run hedge funds available to Mom and Pop but stop them accessing the best talent. Why should the merely affluent make do with managers that aren’t good enough to work at hedge funds? People are free to drink, smoke, gamble and consume junk food yet regulators “protect” retirees from the best investment opportunities products. Long only is wrong only. Real estate brokers are allowed to sell houses and subprime mortgages to overleveraged buyers MANY of whom...
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Machines v humans
Beware of hedge fund geeks bearing greeks? Some models don’t work so all models don’t work? Black box alpha is complicated so stay with “simple” beta? Humans do all the programming at quant funds so it is their sagacity or stupidity driving results. It depends on the questions people ask their computers. If you input the wrong questions with wrong assumptions then the “answers” will be incorrect. Blame the mechanic or the oily rag? I’ve heard many times that quant investing will replace humans but conversely I am hearing, yet again, that “this...
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Hedge fund blog
Hedge fund manager, a long only fund and a index zealot are flying in to present to an institutional investor in New Zealand. As the plane lands they see one purple sheep in a field… Professor Passive says “Every kiwi sheep is purple! I must buy them all now. At any price the farmer asks, no matter how expensive. No need for analysis or due diligence. Market prices are always correct because they are efficient. It’s not my money anyway. I have academic tenure and a Nobel prize. Risk free, for me. An index tracking firm pays me outrageous fees to pimp their product to the...
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Correlation diversify?
Correlation? Most quants are unaware how easy it is to prove rigorously that for ANY time series, there are infinitely other perfectly correlated data sets that STILL add portfolio diversification! That contradiction negates the premise upon which the vast majority of portfolios are supposedly diversified. No surprise those portfolios fail to meet long term objectives and are much too risky. What is the point of an elaborate correlation matrix – guesses made by “experts” on future correlations between asset classes – when the metric is USELESS in measuring pairwise...
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Long only hedge fund
Long only hedge fund? Brand extension is smart but brand destruction is not. What if Ferrari entered the horse and cart industry, Apple manufactured tape recorders, Amazon opened bookshops on main street and Google started delivering snail mail? Hedging requires short selling. Investors want absolute returns, risk management and financial innovation. Why would a TRUE hedge fund manager offer archaic long only? Most individual stocks go DOWN over time. Long term beta gains are confined to about 25% of all stocks. No shorts means no hedge. Long only is not sufficiently diversified. Hedge fund...
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Greatest trade ever
Greatest trade ever? What if the Goldman Sachs CDOs, Abacus 2007-AC1 and Timberwolf, had NOT blown up? The buyers now called brilliant gurus for their perspicacity? GS excoriated for failing to disclose to loser shorts that winning longs bet against them? Would it even have been a legal case? As ever, the message for investors remains: caveat emptor, caveat venditor, caveat utilitor. Buyers, sellers and users be grateful to those betting against you. How else can alpha be made from them? Alpha capture is war and victors don’t take prisoners. It’s the job of good fund managers to...
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Hedge fund definition
Hedge fund definition? Only a small proportion of the “hedge fund” universe actually are hedge funds. Performance independent of the market and risk-adjusted returns will show what is and what isn’t a hedge fund. With hard work and experience we can determine those rare managers in ADVANCE. Absolute alpha NOT repackaged beta is the value proposition. True portfolio diversification is the only reason to choose a hedge fund. 1. A real hedge fund is designed to make money in ALL conditions. The function is not to beat an index in a bull market and preserve capital in a bear. A...
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Asset allocation
Asset allocation is NOT the primary driver of returns. Since the market is emotionally inefficient, performance is driven by skilled portfolio construction from manager and security selection. Was nothing learnt from 2008? Asset allocation dominated conventional “wisdom” and wrecked portfolios the world over. Trillions are mis-invested due to nonsense. Time slows for no-one so don’t grow old riding out drawdowns and gambling on the dangerous, failed and risky ideas of Markowitz, Fama and Sharpe. They have academic tenure but investors don’t. Eventually the markets...
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Yale portfolio
Endowment model? Invest for the long haul? Short term volatility can’t be ignored regardless of time horizon. The endowment model was seen as a “solution” but it was deeply flawed and overexposed to downturns. It was too risky, long biased, illiquid and unhedged. The risk David Swensen took was not justified by the returns generated. He should have achieved +30% CAGR for that level of risk. Swensen urges Mom and Pop into high risk “low cost” index funds while he gambles alumni contributions on illiquid leveraged beta. Most didn’t see his obvious lack of...
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