The seas are swelling and getting rough. Over the last few weeks we’ve heard quite a bit about hedge funds blowing up and performance tanking. Frankly, it does not seem to be letting up anytime soon. The news is quite bleak and I know that you are not turning to this blog to hear more of the bad news; for that read The Financial Times and The Wall Street Journal. My one comment is this; the times ahead will be very treacherous and be prepared for more blood in the streets.
The week before last we had the HedgeAnswers program in San Francisco. It was a great event. The roundtable discussions were highly, highly enjoyable. Participants were able to sit together and ask questions of our speakers, and get direct answers. The key to HedgeAnswers is intimacy and we deliver it. HedgeAnswers is all about providing you with a forum that answers your questions about how to structure funds, how to market funds, how to develop a fund business, how to deal with off-shore regulations, on-shore regulations, tax, accounting, administration, audit, finance issues – you name it, we discuss it. Our next event is on September 5 in Chicago at the Peninsula Hotel. We’re really looking forward to another great event and I hope to see you there.
One of the questions raised last week was how a new manager can deal with the current volatility in the markets. My response was probably not what the questioner wanted to hear. During these volatile times a managers need to take stock of themselves and their ability to deliver performance. If you are thinking of starting up a hedge fund, you first need to clearly define how you are going to manage money. You need to have conviction; you need to believe in yourself and most of all you need to realize that you will make some mistakes.
These current markets are not unique. Markets are constantly changing and evolving and as such managers need to be prepared and able to adapt in order to make money for their investors. If you can’t deliver or you don’t feel confident in making money regardless of the volatility, then get out of (or don’t get into) the hedge fund business. You are in the wrong sandbox.
Stay cool and drink lots of fluids.
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