How Hedge Funds Get Rich

I used to think that those that ran hedge funds got rich because of their incredible returns.  Then I heard about the 2 and 20 fee structure that most hedge funds charged.  The typical hedge fund fee structure (historically) is 2% of assets under management and 20% of all positive returns.  Therefore, if you gave…

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Inside a Moneymaking Machine Like No Other

That’s because the area’s wealthiest residents, scientists all, work for the quantitative hedge fund Renaissance Technologies, based in nearby East Setauket. They are the creators and overseers of the Medallion Fund—perhaps the world’s greatest moneymaking machine. Medallion is open only to Renaissance’s roughly 300 employees, about 90 of whom are Ph.D.s, as well as a…

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The Great Hedge Fund Massacre

In the third quarter of 2015, hedge funds, as a category, were experiencing their worst quarter of flows since the bottom of the financial crisis six years before. There were an avalanche of stories about the industry’s nearly systematic underperformance. It looked and felt like an inflection point. At the time, I asked aloud whether…

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