Could a hedge fund manager really lose a deal over this
Hello,
The other day, I was going to a self improvement seminar, in which the speaker spoke about the importance of ALWAYS having a great appearance and never ever ever looking like a casual slob in public. He told the following story:
A relatively new hedge fund was on the verge of gaining a 300 million dollar investment from a European bank. Supposedley the bank had some employee check out this manager "after hours." While this manager dressed well in the office, he was seen looking like a complete unkempt ill, poorly groomed slob on a weekend. With only one week to go before the deal closed, the bank based on seeing the manager looking like a poorly ill groomed slob on the weekend, pulled out and the fund did not get their investment.
My questions are the following:
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Could the above scenario actually have happened or is it a urban legend?
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Would it really be possible for a Hedge Fund Manager to lose a nine figure investment based on being seen walking around the city looking like a slob on his own time?
Thanks
Bump
From my experience hedge fund managers fall into 2 camps:
One group dresses meticulously at all times generally because they are narcissistic and/or highly concerned with outward appearances
The other group dresses like slobs all the time.
At the end of the day, investors care about performance and allocate their capital accordingly. With that said, I could see an institutional investor being concerned with things such as the PM's appearance, number of kids, married/divorced, golf handicap, etc. because these can all impact performance or provide some general indications. For example, a well-known hedge fund book talks about one of the partners having newborn triplets and the investors are concerned that the guy will slack off and hang with the kids but just the opposite was true (leave the house early and come home late as I have 3 new mouths to feed and kids are a pain in the ass).
Golf handicap? Really?
Also, what's the well-known hedge fund book?
My thoughts...most self improvement gurus probably aren't that tied into the HF or LP communities.
I would honestly question the quality of any LP who made a decision based explicitly based on something that superficial (assuming everything else checked out).
That said, perceptions are important and there are plenty of subtle things which can influence a decision. How you act in your off time is probably one of them.
Story is total bollocks. Investors dont care how someone dresses at the weekends. We do use our networks to gain a bit of background on the managers, are they getting divorced, are they spending their spare time getting coked up, have they got lots of legal shite going on- but why would we care if they were dressed scruffily.
This is absurd. LPs are not sending spies to observe hedge fund managers on their days off. And if they did, there's no way they would pass on an investment that apparently they've already completely diligenced and approved for such a stupid, trivial reason.
Part of me kinda wonders if this a troll post, but assuming it's for real, this story is almost certainly false.
However, I have heard stories I believe about deals not going through for reasons that, if you held a gun to my head, I wouldn't say are that much more logical than this. Examples include people freaking out about minor criminal records (think unpaid parking tickets from many years ago) or almost certainly immaterial misrepresentations (see former CEO of a formerly important search engine).
Like PennTeller said, perceptions matter and, even if you can't say exactly why, subtle things sometimes influence big decisions more than you'd think they should from the outside.
Did it help?
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