On Jul 15, 2008, at 5:34 PM, Jim Devine wrote:
JOHN M. GRIFFIN & JIN XU's Abstract concludes that "... our
study raises serious questions about the proficiency of hedge
fund managers."
Perhaps that's the wrong question.
No, it's the right one. For outside investors, hedge funds and
private equity offer little advantage over the public markets.
They're great deals for the managers of the funds, who typically take
2% of the assets under management plus 20% of the profits, but fees
like that pretty much eliminate whatever performance advantage they
might have had. Don't take only my word for it - check out Yale's
chief investment officer David Swensen, who has a sterling record
making money for our alma mater, and who says pretty much the same
thing.
Doug
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