Pros and the Cons of Investing in Hedge Funds and an Overall Perspective of Raising Money

Radio Archive
RADIO SHOW
listen to to show
http://www.radio-shalom.ca/EN/player.php?URI=/../mp3/Programs/1042/1149.mp3

RICHARD WILSON AS OUR GUEST ,

WEDNESDAY NOVEMBER 3RD  2010

LIVE AT 4PM EDT , 1pm Portland ,Oregon time

MONEY & BUSINESS WITH SAMUEL EZERZERhttp://www.radio-shalom.ca/EN/showemission.php?ID=1042

link via live internet

INTRODUCTIONMONEY MONEY & BUSINESS

Pros and the Cons of Investing in Hedge Funds and an Overall Perspective of Raising Money

WHAT is it about hedge funds that are so fascinating ? Contrary to the popular belief that hedge funds are very volatile investment instruments, hedge funds actually have many advantages over traditional investment vehicles like bond and equity investments. Hedge funds can achieve positive gains regardless of market trends, and they can reduce overall portfolio risk. As such, investing in a hedge fund can be a good strategy if you want a more balanced portfolio. Studies have shown that hedge funds are more effective than traditional investment vehicles when it comes to minimizing risks as well as maximizing returns . Since hedge funds employ more sophisticated and diverse investment strategies and have a wider range of markets to invest in, hedge funds offer a lot more diversification than traditional investment options.
Many people and investors don’t really know what they do, other than pay themselves and their principals ridiculous amounts of money. When something goes wrong in the financial market weather it will be a market collapse ,a currency crisis, a housing collapse or a sovereign debt default—they are quick to be blamed, …..their shadowy character making them ideal scapegoats ,and big institutional investors and wealthy individuals will still throw money at them.
The biggest downside to hedge funds investing is the lack of readily available public information about hedge funds. Hedge funds need not register with the SEC. Thus, they are not subject to periodic reporting requirements. This means that ordinary investors who are interested in investing in hedge funds need to do a lot more work when researching a hedge fund than when checking out other registered investment instruments.
Hedge funds are the James Bonds of the marketplace. They play bigger games, take bigger risks, use unorthodox methods, and have the power to capture the public imagination in a way that their lesser counterparts have difficulty approaching. So why do investor flock to these hedge funds ? Is it just for higher returns ? Or are they tired and fed up with losing accounts and smooth talking brokers who are only accumulating their own pension fund!
On today's show we have live from Portland Oregon Mr Richard Wilson a hedge fund expert who will give us insight on the pros and the cons of investing in hedge funds and an overall perspective of raising money for hedge funds!!!

My name is Samuel Ezerzer thank you for tuning in to Money and Business on radio shalom CJRS 1650 AM in Montreal, the financial Capital of Canada...I am a Financial Consultant for T E Wealth , Financial Consultants specializing in financial planning , Investment Management , and retirement planning ,and if you have any questions on money and business show or please give me a call directly at 514 738 4100 ext 272 or you can visit our website at www.radio-shalom.ca and listen on live stream and check our archives. You may also email me with your questions or suggestions on today’s show at moneyandbusinessshow@gmail.com and I will reply to your questions, and if you need to have your financial analysis and planning please email me at sezerzer@temirador.com or contact information  www.tewealth.com

RICHARD WILSON from Portland Oregon is an expert in hedge fund marketing, capital raising and fund start-ups and has a following of 38,000 active members and you can read up on him at hedgefundgroup.org ,

Biography

Richard Wilson is head of the Hedge Fund Group (HFG) which now has over 38,000 active members and runs the #1 most popular certification and training program in the industry, the Certified Hedge Fund Professional (CHP) Designation Program. Richard is an expert in hedge fund marketing, capital raising, and fund start-ups and his firm provides services and assistance to funds within these areas. Most people on this call may know Richard from his blog HedgeFundBlogger.com but his other websites include HedgeFundGroup.org, and HedgeFundTraining.com.

questions

I have noted that there have been an influx of hedge funds start ups in recent years, Why in your opinion have there been so many start ups every week? And how would you describe a typical investors profile?

What is the hardest part about running a hedge fund?

How exactly does a hedge fund manager to run $1B? or even $100M? Who are these investors who trust hedge funds enough to invest their money with them? Aren't they risky?

How many months or years does it take to raise $100M in capital?

So is hedge fund marketing is it very challenging?

Richard The salary of a hedge fund manager can go into billions, based on whose portfolio he's managing. The top hedge fund manager in the United States made around US$ 4 billion in 2009 and some can make up to 1billion a year, so that's the higher end of the hedge fund manager salary spectrum. Of course, not all of them make anywhere around that amount, but hedge fund managers have one of the highest paying jobs. what factors is the hedge fund manager salary is based on; is it commissions performance ....

 

Richard do hedge fund managers often invest their own money ?

 

Managers of hedge funds are usually paid in “carried interest,” a term that describes a manager’s share of profits in certain types of partnerships. Payouts are currently taxed at the 15 percent capital gains rate, but Democrats want the levy to resemble ordinary income rates, which are expected to be more than 39 percent next year , Democrats say the tax increase adds a new level of fairness to the tax code, while Republicans warn its enactment will ruin the economy. ? Is it fair to increase taxes for managers who make 1 million dollars a year especialy whe so many of them are out of business ?

Becoming a hedge fund manager is not easy and you need a pretty good track record if people are to trust you with their wealth. Hedge fund managers generally hold a degree or two in fields like mathematics economics stock market and finanacial mamanagement ... etc.

Hedge funds managers generally have to be from reputed schools in the field, because clients check all of this when they entrust a a hedge fund manager with their money. Secondly, the hedge fund manager has to have a good work experience record. The manager generally starts off small, as an analyst or at a job in a similar company, where he learns his trade and how to work in the stock market. It takes a long experience record and successful investing to become a good hedge fund manager that people give their money to.

So How do you Become a Hedge Fund Manager? If someone wanted to start a hedge fund how do they go about doing so?

There is a notion out there that most Americans would be better off if hedge funds failed. Hedge funds manipulate the stock markets, trade on insider information, and rob 99% Americans,,,Richard what can you say as an arguement against those critics?

Had Wall Street not been bailed out, nearly every hedge fund would have gone out of business Richard? do you share that view?

What do you think the mainstream media is missing when they publish stories on hedge fund managers? What is misunderstood?
How are hedge funds doing this year performance wise? I hear all sorts of things on the news about hedge funds having mediocre at best performance what is going on?

Are there more hedge funds leaving the business or coming to this niche area?

At this point, you are no doubt aware that there are important questions to ask before investing in a hedge fund or a fund of hedge funds. Look before you leap and make sure you do your research. ,,,
what are some of the list of questions to consider when seeking a hedge fund investment richard ?

Who are the founders and the principals? What are their backgrounds and credentials? How long before the founders/principals expect to retire?
How long has the fund been in business? What is the ownership structure? (e.g. Is it a limited liability company? Who are the managing members? Are classes of shares issued?)
What is the fee structure and how are principals/employees compensated?
What is the basic investment strategy (must be more specific than proprietary)?
How often is valuation performed and how often are reports produced for investors (or limited partners)?
What are the liquidity provisions? (e.g. What is the lock-out period?)
How does the fund measure and assess risk (e.g. VaR)? What is the track record in regard to risk?
Who are the references

About Samuel EzerzerSamuel Ezerzer Bsc, Producer & Host of the Money & Business Show ;