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Two Books Analyse What Makes Hedge-Fund Managers Great—And Reach Very Different Conclusions

Neat little review from the Economist of The Alpha Masters: Unlocking the Genius of the World’s Top Hedge Funds by Maneet Ahuja and The Hedge Fund Mirage: The Illusion of Big Money and Why It’s Too Good To Be True. by Simon Lack.

I have already spoken about The Hedge Fund Mirage and found it to be a pointed skewering of the myth of hedge funds and well worth purchasing. The Alpha Masters I am not so sure of after reading this paragraph.

Throughout her book Ms Ahuja seems to be in a trance herself, in thrall to the glamour of her subjects. She never questions the judgment of her alpha-men and always gives them the last word. She devotes dozens of pages to Mr Paulson’s rise in the hedge-fund industry, but glosses over his poor performance in 2011. His results have led some to speculate that he may have the unfortunate record of both earning and losing the most money in hedge-fund history. She quotes one of his 2011 letters to investors asserting that bank stocks—whose struggles pulled down his funds’ performance—would rebound when the economy improves, never criticising what he did or pointing out that investors will have to wait ages to claw back such massive losses. Nor does she grasp at bigger themes or the many common factors that hedge-fund managers share. Is it ego, courage, good networks or charisma that has brought them more success than their fellow financiers?

Sounds like the sort of breathless, damp in the undies missive you would get from a teenage girl after she had seem Justin Beibers bum crack.


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