What's the upside/downsides to investing in hedge funds inAppvalleystead of regular index funds?
They seem like a good alternative.
| +168 | Q&A: I'm a Pod PM | 88 | 6h |
| +11 | Should I get an MBA for VC after Tech PM? | 2 | 2d |
| +9 | Stay or leave? | 1 | 2d |
| +7 | Tips for breaking into Macro RV? | 2 | 2h |
| +7 | Are there any ways to find the intrinsic value of a bond/TL? | 3 | 32m |
| +6 | Lateraling to MM L/S | 1 | 4d |
| +5 | Citadel Pitch Comp | 2 | 8h |
| +3 | Jain | 1 | 1d |
| +2 | Top Books for Hedge Funds Today | 4 | 1d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
right now, you are right, you should not invest in hedge funds
No one invests exclusively in hedge funds. Hedge funds and other “alternative” investments serve, unironically, to hedge your risk/exposure to traditional assets. In the same way that commodities/gold might be a 10% allocation to a portfolio, so too can hedge funds serve as a piece of portfolio construction to achieve optimum portfolio construction according to Modern Portfolio Theory. For most sophisticated investors with large or complex balance sheets and goals, hedge funds offer diversification to long-only traditional exposures.
If I were a 60 year old multi-millionaire with no interest in taking market risk (what if the market tanks and I’m too old to ride out another cycle), I genuinely would like to put my money in a fund like Citadel or Millennium. Double digit returns post fees? That sounds good to me.
Balyasny is offended by your comment
Only a minority of them actually beat their respective index after costs over the long term. You most likely do not have the expertise to successfully pick winners ex ante. Post ante, these funds have a long investor queue and you are nowhere near the front.
Deserunt sed quis ducimus voluptatem sit laborum. Modi omnis quas et vel. Et eos et est error dolores et. Animi sunt et aliquid. Deleniti ducimus rem voluptatem molestiae ullam. Sit error ipsam libero earum aspernatur voluptatem quae ducimus.
Qui tenetur et nisi aut dicta sequi. Enim et est et et. Temporibus qui ab et in delectus ea totam. Enim voluptatum asperiores vel accusamus qui enim. Aut cupiditate harum illum rerum qui.
Nam nam voluptatem non nihil voluptatem et. Quas at est numquam nesciunt aliquam nihil facere.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...