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Hurdles and Highwater marks definitely need to be spelled out here (by someone with a better financial literacy than I).
Also, side pockets.
The article could be improved by this -- hedgefunddot.
Recommend adding additional color on hurdles. For example, are highwater marks typically structured at a fund level or an investor level? In general, what portion of funds use a highwater mark vs. other hurdles? —Preceding unsigned comment added by 65.246.68.2 ( talk) 16:32, 8 October 2010 (UTC)
The mention of Seward & Kissell in the intro looks like a vanity edit. Anyone else have any views on this. As I explained when I removed it originally (it has been reinserted), I think the innovation was the investment strategy, and the law firm wasn't particularly important. (I say this as a lawyer.) Anyone have a different view? Westmorlandia ( talk) 12:58, 17 March 2010 (UTC)
I am researching hedge funds and came across a reference that is needed here.
In the US Regulation section, the page states that non-accredited investors can participate in hedge funds, but a citation is needed.
I found this...does it work? http://www.hedgefundlawblog.com/non-accredited-investors-in-hedge-funds.html -- 98.108.136.252 ( talk) 06:33, 18 July 2010 (UTC)
It is a blog, so it may be a low quality citation. Why not reference Rule 506 of Regulation D directly? Lawblogger18 ( talk) 21:16, 24 December 2010 (UTC)
Has anyone else heard anything about Dichev and Yu's research, summarized an Absolute Return+Alpha article here? I'm not quite sure what to make of it. II | ( t - c) 09:09, 12 December 2010 (UTC)
Its not anything new -- what is it that you find surprising? Lawblogger18 ( talk) 21:17, 24 December 2010 (UTC)
In the history section, first sentence reads, "Sociologist, author, and financial journalist Al Harrington is credited with the creation of the thirty second hedge fund in 1249.[2]" This sentence is complete nonsense for a host of reasons, including the fact that Harrington is a basketball player, and that a "thirty second hedge fund in 1249" has no meaning. Does anyone know what was previously here? The next sentence begins with a reference to "Jones." 143.58.161.6 ( talk) 18:15, 6 January 2011 (UTC)
{{Request edit}}
I have prepared for consideration a new draft of the
current History section and
posted it to my user page. I have a potential conflict of interest, since I work in the industry (
see here) but that also has its upside: I've got quite a bit of research and knowledge to draw upon, and this article could use plenty of work.
Basically, the new section is an expansion on the existing version, only with more information and better cited sources. The current History section is rather short and does not explain how hedge funds found developed and became more widely used over time to their current form, so the proposed new version includes more detail on how Alfred Jones' fund became the first hedge fund and how the kind of fund he managed became known as a "hedge fund". I have also partly rewritten the explanation of how Jones' fund operated so that it is more clear to a layperson. The section then expands to cover the development of hedge funds from the 1960s to the 1990s. In particular, the proposed version now describes how hedge funds gained popularity in the late 1980s through to the 1990s and the difference in strategies used over time. All the new information has been carefully researched from reliable sources and I have also added citations to existing information that previously did not have a citation.
Feel free to offer your thoughts, or move it if you like. Thanks in advance. -- Bryant Park Fifth ( talk) 21:09, 16 March 2011 (UTC)
I have witnessed more than one editor take a stab at the first sentence of this Article; and try to tackle the definition of what is a hedge fund, only to have such attempt reverted or revised. Maybe its time to fess up that there is multiple definitions to what a hedge fund is because it is a loose reference to a type of investment vehicle which is not defined by regulation or any other standardized definition. Lawblogger18 ( talk) 08:44, 8 February 2011 (UTC)
Further to my notes above, I have prepared new versions of two more sections ( Strategies and Performance measurement) and moved forward with replacing the existing sections for each. The Strategies section was previously completely unsourced, and the list structure of the subsections was inappropriate for the level of detail. The first four subsections have been rewritten as prose, still addressing the concepts that had been listed under each heading. I have expanded the Performance measurement section to include up-to-date performance figures for the industry and rewritten the language on performance indicators for clarity. I am able to answer any questions you might have with regards to these two sections, and any further improvements would be more than welcome. Bryant Park Fifth ( talk) 16:24, 18 April 2011 (UTC)
I have just posted, in my user space, new drafts two separate but topically related parts of this article. First: the top-level Hedge fund risk; second: the section associated with the second-level heading Systemic risk. I suggest these proposed versions ( Hedge fund risk, Systemic risk) replace the current ones ( Hedge fund risk, Systemic risk). I believe the longer portion, the full section, is evidently an improvement on what is there now. At present it is almost entirely unsourced, and to my reading has not enough content to work better as a list (I am looking to WP:EMBED for guidance). Instead I have organized it topically, addressing the most significant sub-topics as I see them. It is perhaps worth noting that I have made somewhat different use of a citation introduced last week by a once-off editor, subsequently repositioned by Servalo. I believe this version should be useful both to the absolute beginner as well as someone of greater familiarity with the subject. As to Systemic, the new is slightly longer than the current, addressing the same essential topics but with clearer language, more specific statements and updated to include recent writings. As I am interested in seeking consensus, I will ask for input from recently involved editors, but if there's not much activity one way or the other I will likely move these after the weekend. Suggestions most welcome. -- Bryant Park Fifth ( talk) 19:34, 8 April 2011 (UTC)
Look good to me. Servalo ( talk) 10:52, 2 May 2011 (UTC)
As many probably know Wiki's policy on lead paragraphs WP:LEAD"The lead should be able to stand alone as a concise overview of the article. It should define the topic, establish context, explain why the subject is interesting or notable, and summarize the most important points—including any prominent controversies." The present lead does a good job of defining the topic but it goes into too much detail and does not give a summary of the entire article. I suggest we create a new section called Overview or Description and move most of the lead text into that section and then rewrite the lead so that it briefly defines and fully summarizes the entire article. I am willing to do this but wanted to see what others think. Comments?-- — Keithbob • Talk • 14:32, 29 June 2011 (UTC)
I've already got a new section to propose, if this isn't too ambitious: the introductory section, which is not very good in its present form. I realize that this section has been debated before, but I'll make the case here for my version (located in my user space here: User:Bryant_Park_Fifth/Hedge_fund). First, the very first sentence is a poor description of what makes a hedge fund a hedge fund. The fact of the "hedged" portfolio and the reasons for doing so are most important to understand here, and the rest can be described subsequently.
Second paragraph takes the same focus as the one there now: a full summary of what makes hedge funds unique compared to other funds, and important general information about how they work and the shape of the industry. The performance fee detail from the original first sentence is now here, in more appropriate context. Overall, this is quite similar to the current second paragraph, but I think significantly more informative.
The third paragraph deals with regulations, which is similar to the current third paragraph. Once again, the version I have written is more complete and up to date. And some information in the current version that is not about regulation I have relocated to the second paragraph.
I recognize that this draft is about twice as long (from about 200 words to about 400 words) but given the complex subject and substantial length of this article, I think it's appropriate. Feel free to move it over if you agree, and offer suggestions if you have concerns about making this change. Note that if you do, I have commented out the previously prepared "History" section, so please simply ignore that. Lastly, all of my previously expressed cautions about editing directly still apply. -- Bryant Park Fifth ( talk) 19:10, 21 March 2011 (UTC)
It's good. I'd suggest moving the to sentences near the end on the institutional ownership -- they are good factual material and should be in the article somewhere, but are too detailed for the introduction I think. I'm not sure where they fit best so I've left for now, but I have corrected a minor wording error on performance fees. Servalo ( talk) 17:02, 6 April 2011 (UTC)
I've completed a draft for a new version of the section about the regulation of hedge funds, which is available in my user space here. I've kept the implied structure, although it is now written more fully and clearly and is properly referenced throughout (much of the current one is not). What's all-new is a sub-section covering the new Dodd-Frank regulations, which, surprisingly, are currently mentioned not at all. I also suggest simplifying the section name from " Regulatory issues" to " Regulation". As before, I'm inclined to seek consensus for the change before implementing it, and I'm open to additional suggestions. -- Bryant Park Fifth ( talk) 20:58, 1 April 2011 (UTC)
Material looks ok to me. If you are inclined to go further, I think a lot of the section is quite technical and might be better as a separate page "Hedge fund regulation"? I've intended to take an axe to structure of the article for some time... Servalo ( talk) 16:59, 6 April 2011 (UTC)
I have been wanting to learn WHAT a hedge fund is for the longest time, as I am passionately interested in politics and economics. Coming from Google, I was not sure whether the Wiki article would be too scientific or too lay-person. I see in this discussion people are talking about the merit of the intro and definition. I suggest you come up with a simple, general version of what a hedge fund is / does (given that it is not an exact, or recognized definition), and then have a section at the top for different meaning(s) and clarifications.
I jumped straight to the controversy area and started reading because that's where I thought I would find the most valuable information. I find the sources and information cited here to be very one-sided and biased. For example there is a reference to how FSA, a major economic/financial adviser to the government, interviewed hedge fund managers, and asked them if hedge funds are dangerous. I'll repeat that back: hedge fund managers were asked by government experts if hedge funds are safe. The government "experts" then used the response of these hedge fund "experts" to say that hedge funds are safe. And then they say that "no one hedge fund individually poses systemic risk". Yes, but that is misleading, because it implies that the entire existence of hedge funds, in their numbers as previously specified in the article, are also safe. I'd also like to see a list of notable failed hedge funds, rather than just notable successful ones.
Perhaps there is just a struggle here in being scholarly - in other words, the sources and academia themselves are inherently biased. Well this must be true, hedge fund managers are educated, and they are educated by people who advocate for the principles that underlay hedge funds, thereby encouraging their existence in the system. So naturally those people who are educating are also writing the textbooks, or the articles, or both, etc, which are then referenced here as scholarly, reliable sources.
This article is pretty important and people will be coming here much more often as time goes by.
Azadismind ( talk) 23:48, 22 June 2011 (UTC)
"A hedge fund is a private investment fund that participates in a range of assets and a variety of investment strategies intended to protect the fund's investors from downturns in the market while maximizing returns on market upswings."
What about long-only funds? The sentence appears to display a belief that a hedge fund must use hedging, which is not the case. HedgeFundBob ( talk) 05:26, 7 July 2011 (UTC)
Thanks Westmorlandia, good comments. The solution is to go by reliable sources per Wiki policy. Here is how the term, hedge fund, is defined:
"When it comes to investing directly in hedge funds, institutions seem to take comfort in managers with the size and infrastructure to mitigate reputational risk and with some ability to make tactical asset-¬allocation decisions," says Girish Reddy, co-¬founder and managing partner of $6 billion, New York-based fund-of-hedge-funds firm Prisma Capital Partners. The importance of brand-name recognition is evident in the Hedge Fund 100, where the five largest firms - Bridgewater, J.P. Morgan Asset Management, Man Investments, Paulson & Co. and Brevan Howard Asset Management - managed a staggering $221.6 billion in combined assets when this year began. That's nearly as much as the $260 billion in total assets that all the firms in the Hedge Fund 100 managed a decade ago in our inaugural ranking. All told this year's 100 biggest firms managed a total of $1.21 trillion at the start of this year, up 12 percent from the $1.08 trillion in assets that the firms on the 2010 Hedge Fund 100 had. What remains to be seen as the hedge fund brand wars unfold is whether managers will be able to deliver the kind of consistent, noncorrelated investment returns that investors have come to expect. Size has not always been kind to hedge fund firms. Managers that have risen to the top of the Hedge Fund 100 (think Farallon ¬Capital -Management and ¬Goldman Sachs Asset ¬Management) have had a tendency to fall down again.----Euromoney Institutional Investor, “Hedge Fund100: Big Firms Strive to Earn Trust and Dollars of Insitutional Investors, Iogen Rose-Smith, May 2011 -- — Keithbob • Talk • 20:54, 7 September 2011 (UTC)
Back in March, I worked with a couple of other editors on this page to write a new introduction section ( that conversation here). The resulting version was much more complete and accurate. (Side note: as I disclosed at the time, I have a vested interest in the topic.) In the months since, the section has changed considerably, unfortunately introducing outdated and inaccurate information. Here are some problems with the current version:
One way or the other, all of the above needs to be fixed. I suggest returning to the version from April 27, which was had clear consensus and would be an improvement. On a related matter, the second two paragraphs of that version still exist, though they have been moved down to the "Description" section. I think it makes sense for those to be in the introduction. This is how they were intended, and hedge funds are a big enough topic that a single short paragraph is not quite enough. Can we find consensus make this change? Bryant Park Fifth ( talk) 13:39, 31 October 2011 (UTC)
Thanks AWhiteC, I appreciate your interest and involvement, although I'm afraid the current introduction is still inaccurate and also too short. I'll ennumerate them, first in the lead and then in the new material in "Description":
As others have been bold, I'm going to be bold myself and change the top of the article back to what it was in late April. That version then had the support of Banaticus (who I invited to discuss here, and made some changes to the article yesterday) and another editor. If there are concerns about the version I am about to restore, I am more than willing to discuss them here. My goal here is to find agreement on a version of this introduction that is accurate and satisfies the requirements of WP:LEAD. Thank you. -- Bryant Park Fifth ( talk) 19:27, 1 November 2011 (UTC)
Hello again Westmorlandia, thank you for your response and apologies for my delay in replying to you. The wording of the sentences on open-endedness and the NAV statement based on your recent edits appear fine to me.
You noted that you would "not object" to re-adding the sentence on 61% of investment in hedge funds being from institutional sources; I believe this should be included in the introduction and wonder if you would mind adding it to the third paragraph, as you suggest?
Also, looking at the current introduction, I see that you have made an edit to amend the wording on management fees. Here, I wonder if a compromise between the new wording and the original could be made:
Thank you. Bryant Park Fifth ( talk) 16:24, 30 January 2012 (UTC)
I have issues with this paragraph in the current lead:
It is not encyclopedic to say what the subject is not. Or to describe it by saying how its different from something else. We just say what it is. Therefore the sentence about mutual funds should be removed IMO. Thoughts from others?-- — Keithbob • Talk • 16:28, 4 November 2011 (UTC)
I'm sorry to have to say this, but the section on Systemic risk (under Debates and controversies) is propagandistic, and needs to be made more NPOV. My reasons for saying so are as follows.
The hedge fund industry is a risk to the financial system, and it's not just me saying that. I therefore propose that the Systemic risk section be rewritten to be more neutral in tone. AWhiteC ( talk) 22:25, 1 December 2011 (UTC)
Bryant Park Fifth, you seem to be reluctant to state the nature of your connection to the MFA, which I understand is the main advocacy outfit for hedge funds. Can I just ask a simple question, because it is important: are you remunerated in any way to edit Wikipedia in connection with the hedge fund industry?
I have been thinking about our points of disagreement, and I think I have found ways to work towards resolving them, as follows.
Hey, guys, I'm here from the 3O board. It looks like this is a pretty complex issue, so forgive me if I take some time to look into it in more depth. If I don't respond in 24 hours, please feel free to post a message to my talk page, asking me what's going on, or just relist it on the 3O board for someone else to take; whichever is your preference. stricken, see response below
In the meantime, let me just say that I think Bryant's disclosure of his COI is quite reasonable and forthright. Really, all we need to know is that he has one, so we can submit his views to the greater scrutiny they deserve. At first glance, I don't see any problem with his edits, so unless you have a complaint about a specific edit (or edits), we don't really need to go into any more detail, so let's not press him for any more information on it. Such demands could could be interpreted as veiled accusations, but I for one am perfectly willing to assume good faith on them if they don't continue. Finally, I'd just like to commend you on one of the more civil disputes I've seen listed at the 3O board. Thanks! Writ Keeper ⚇ ♔ 23:03, 8 February 2012 (UTC)
Okay, after looking at the dispute, I tend to agree that AWhiteC's wording would be preferable, but I think you, Bryant, are disagreeing because of a misunderstanding of the text. For the "herd behavior" issue, read it closer: you've quoted it "Systemic risk is increased in a crisis if there is 'herd' behavior," but the text in the article says, "Systemic risk is increased if in a crisis there is "herd" behaviour." I think that "if" in there brings it more into line with what you were thinking. The "leverage" language is similar; it "can lead" to liquidations and illiquidity "can be" an amplifier; the article does not say that either of them definitively cause these effects, only that they can. Really, the language in the entire section seems to me to be quite guarded and cautious (which is exactly how it should be in the dismal science); I don't think there's a need to make it any more so. Finally, for your point about the size of the hedge funds, I actually can't find any particular mention of it in the subsection we're talking about; is it in a different subsection?
Having said all that, let me just add a few notes as a normal editor: it seems to me that the subsection could use a little copyediting love. There's nothing obviously wrong with it, but I think a lot of problems that Bryant is having stems from the layout of sentences and use of punctuation; if they were solved, we might not even be having this discussion. Once I hear back from one of you, I'll start trying my hand at improving it, starting with commas around the dependent clause in the "herd mentality" sentence. Writ Keeper ⚇ ♔ 01:40, 9 February 2012 (UTC)
Although the hedge fund industry is large, hedge funds themselves are individually relatively small in terms of the assets they manage, and operate generally with low leverage, thereby limiting the potential harm to the economic system should one of them fail.((source))
Hello AWhiteC and Writ Keeper, I have gone back to the Mallaby book and he covers the points from the above language in his introduction. On page 12, he writes:
On the same page, he writes:
The "small enough to fail" quote comes from his conclusion, where he states on page 376:
To respond to AWhiteC's point about funds over $100 billion, on re-reading the book's conclusion I noticed that Mallaby states the following on page 390:
He goes on to note there are "nine thousand or so" other funds which are considerably smaller.
These two quotes underline the point that I think should be included here, that the majority of hedge funds are small in comparison to other institutions in the financial sector. Perhaps a further tweak to the suggested addition would help here:
Thanks, Bryant Park Fifth ( talk) 14:29, 14 February 2012 (UTC)
"Financial writer Sebastian Mallaby has said that hedge funds tend to be " small enough to fail", since most are relatively small in terms of the assets they manage, and they usually operate with low leverage, thereby limiting the potential harm to the economic system should one of them fail."
Writ Keeper, your wording looks fine to me. Thanks, Bryant Park Fifth ( talk) 21:59, 15 February 2012 (UTC)
Writ Keeper, I am happy with your wording. I would just go ahead and make the change. AWhiteC ( talk) 19:33, 16 February 2012 (UTC)
![]() | This is an archive of past discussions. Do not edit the contents of this page. If you wish to start a new discussion or revive an old one, please do so on the current talk page. |
Archive 1 | Archive 2 | Archive 3 | → | Archive 5 |
Hurdles and Highwater marks definitely need to be spelled out here (by someone with a better financial literacy than I).
Also, side pockets.
The article could be improved by this -- hedgefunddot.
Recommend adding additional color on hurdles. For example, are highwater marks typically structured at a fund level or an investor level? In general, what portion of funds use a highwater mark vs. other hurdles? —Preceding unsigned comment added by 65.246.68.2 ( talk) 16:32, 8 October 2010 (UTC)
The mention of Seward & Kissell in the intro looks like a vanity edit. Anyone else have any views on this. As I explained when I removed it originally (it has been reinserted), I think the innovation was the investment strategy, and the law firm wasn't particularly important. (I say this as a lawyer.) Anyone have a different view? Westmorlandia ( talk) 12:58, 17 March 2010 (UTC)
I am researching hedge funds and came across a reference that is needed here.
In the US Regulation section, the page states that non-accredited investors can participate in hedge funds, but a citation is needed.
I found this...does it work? http://www.hedgefundlawblog.com/non-accredited-investors-in-hedge-funds.html -- 98.108.136.252 ( talk) 06:33, 18 July 2010 (UTC)
It is a blog, so it may be a low quality citation. Why not reference Rule 506 of Regulation D directly? Lawblogger18 ( talk) 21:16, 24 December 2010 (UTC)
Has anyone else heard anything about Dichev and Yu's research, summarized an Absolute Return+Alpha article here? I'm not quite sure what to make of it. II | ( t - c) 09:09, 12 December 2010 (UTC)
Its not anything new -- what is it that you find surprising? Lawblogger18 ( talk) 21:17, 24 December 2010 (UTC)
In the history section, first sentence reads, "Sociologist, author, and financial journalist Al Harrington is credited with the creation of the thirty second hedge fund in 1249.[2]" This sentence is complete nonsense for a host of reasons, including the fact that Harrington is a basketball player, and that a "thirty second hedge fund in 1249" has no meaning. Does anyone know what was previously here? The next sentence begins with a reference to "Jones." 143.58.161.6 ( talk) 18:15, 6 January 2011 (UTC)
{{Request edit}}
I have prepared for consideration a new draft of the
current History section and
posted it to my user page. I have a potential conflict of interest, since I work in the industry (
see here) but that also has its upside: I've got quite a bit of research and knowledge to draw upon, and this article could use plenty of work.
Basically, the new section is an expansion on the existing version, only with more information and better cited sources. The current History section is rather short and does not explain how hedge funds found developed and became more widely used over time to their current form, so the proposed new version includes more detail on how Alfred Jones' fund became the first hedge fund and how the kind of fund he managed became known as a "hedge fund". I have also partly rewritten the explanation of how Jones' fund operated so that it is more clear to a layperson. The section then expands to cover the development of hedge funds from the 1960s to the 1990s. In particular, the proposed version now describes how hedge funds gained popularity in the late 1980s through to the 1990s and the difference in strategies used over time. All the new information has been carefully researched from reliable sources and I have also added citations to existing information that previously did not have a citation.
Feel free to offer your thoughts, or move it if you like. Thanks in advance. -- Bryant Park Fifth ( talk) 21:09, 16 March 2011 (UTC)
I have witnessed more than one editor take a stab at the first sentence of this Article; and try to tackle the definition of what is a hedge fund, only to have such attempt reverted or revised. Maybe its time to fess up that there is multiple definitions to what a hedge fund is because it is a loose reference to a type of investment vehicle which is not defined by regulation or any other standardized definition. Lawblogger18 ( talk) 08:44, 8 February 2011 (UTC)
Further to my notes above, I have prepared new versions of two more sections ( Strategies and Performance measurement) and moved forward with replacing the existing sections for each. The Strategies section was previously completely unsourced, and the list structure of the subsections was inappropriate for the level of detail. The first four subsections have been rewritten as prose, still addressing the concepts that had been listed under each heading. I have expanded the Performance measurement section to include up-to-date performance figures for the industry and rewritten the language on performance indicators for clarity. I am able to answer any questions you might have with regards to these two sections, and any further improvements would be more than welcome. Bryant Park Fifth ( talk) 16:24, 18 April 2011 (UTC)
I have just posted, in my user space, new drafts two separate but topically related parts of this article. First: the top-level Hedge fund risk; second: the section associated with the second-level heading Systemic risk. I suggest these proposed versions ( Hedge fund risk, Systemic risk) replace the current ones ( Hedge fund risk, Systemic risk). I believe the longer portion, the full section, is evidently an improvement on what is there now. At present it is almost entirely unsourced, and to my reading has not enough content to work better as a list (I am looking to WP:EMBED for guidance). Instead I have organized it topically, addressing the most significant sub-topics as I see them. It is perhaps worth noting that I have made somewhat different use of a citation introduced last week by a once-off editor, subsequently repositioned by Servalo. I believe this version should be useful both to the absolute beginner as well as someone of greater familiarity with the subject. As to Systemic, the new is slightly longer than the current, addressing the same essential topics but with clearer language, more specific statements and updated to include recent writings. As I am interested in seeking consensus, I will ask for input from recently involved editors, but if there's not much activity one way or the other I will likely move these after the weekend. Suggestions most welcome. -- Bryant Park Fifth ( talk) 19:34, 8 April 2011 (UTC)
Look good to me. Servalo ( talk) 10:52, 2 May 2011 (UTC)
As many probably know Wiki's policy on lead paragraphs WP:LEAD"The lead should be able to stand alone as a concise overview of the article. It should define the topic, establish context, explain why the subject is interesting or notable, and summarize the most important points—including any prominent controversies." The present lead does a good job of defining the topic but it goes into too much detail and does not give a summary of the entire article. I suggest we create a new section called Overview or Description and move most of the lead text into that section and then rewrite the lead so that it briefly defines and fully summarizes the entire article. I am willing to do this but wanted to see what others think. Comments?-- — Keithbob • Talk • 14:32, 29 June 2011 (UTC)
I've already got a new section to propose, if this isn't too ambitious: the introductory section, which is not very good in its present form. I realize that this section has been debated before, but I'll make the case here for my version (located in my user space here: User:Bryant_Park_Fifth/Hedge_fund). First, the very first sentence is a poor description of what makes a hedge fund a hedge fund. The fact of the "hedged" portfolio and the reasons for doing so are most important to understand here, and the rest can be described subsequently.
Second paragraph takes the same focus as the one there now: a full summary of what makes hedge funds unique compared to other funds, and important general information about how they work and the shape of the industry. The performance fee detail from the original first sentence is now here, in more appropriate context. Overall, this is quite similar to the current second paragraph, but I think significantly more informative.
The third paragraph deals with regulations, which is similar to the current third paragraph. Once again, the version I have written is more complete and up to date. And some information in the current version that is not about regulation I have relocated to the second paragraph.
I recognize that this draft is about twice as long (from about 200 words to about 400 words) but given the complex subject and substantial length of this article, I think it's appropriate. Feel free to move it over if you agree, and offer suggestions if you have concerns about making this change. Note that if you do, I have commented out the previously prepared "History" section, so please simply ignore that. Lastly, all of my previously expressed cautions about editing directly still apply. -- Bryant Park Fifth ( talk) 19:10, 21 March 2011 (UTC)
It's good. I'd suggest moving the to sentences near the end on the institutional ownership -- they are good factual material and should be in the article somewhere, but are too detailed for the introduction I think. I'm not sure where they fit best so I've left for now, but I have corrected a minor wording error on performance fees. Servalo ( talk) 17:02, 6 April 2011 (UTC)
I've completed a draft for a new version of the section about the regulation of hedge funds, which is available in my user space here. I've kept the implied structure, although it is now written more fully and clearly and is properly referenced throughout (much of the current one is not). What's all-new is a sub-section covering the new Dodd-Frank regulations, which, surprisingly, are currently mentioned not at all. I also suggest simplifying the section name from " Regulatory issues" to " Regulation". As before, I'm inclined to seek consensus for the change before implementing it, and I'm open to additional suggestions. -- Bryant Park Fifth ( talk) 20:58, 1 April 2011 (UTC)
Material looks ok to me. If you are inclined to go further, I think a lot of the section is quite technical and might be better as a separate page "Hedge fund regulation"? I've intended to take an axe to structure of the article for some time... Servalo ( talk) 16:59, 6 April 2011 (UTC)
I have been wanting to learn WHAT a hedge fund is for the longest time, as I am passionately interested in politics and economics. Coming from Google, I was not sure whether the Wiki article would be too scientific or too lay-person. I see in this discussion people are talking about the merit of the intro and definition. I suggest you come up with a simple, general version of what a hedge fund is / does (given that it is not an exact, or recognized definition), and then have a section at the top for different meaning(s) and clarifications.
I jumped straight to the controversy area and started reading because that's where I thought I would find the most valuable information. I find the sources and information cited here to be very one-sided and biased. For example there is a reference to how FSA, a major economic/financial adviser to the government, interviewed hedge fund managers, and asked them if hedge funds are dangerous. I'll repeat that back: hedge fund managers were asked by government experts if hedge funds are safe. The government "experts" then used the response of these hedge fund "experts" to say that hedge funds are safe. And then they say that "no one hedge fund individually poses systemic risk". Yes, but that is misleading, because it implies that the entire existence of hedge funds, in their numbers as previously specified in the article, are also safe. I'd also like to see a list of notable failed hedge funds, rather than just notable successful ones.
Perhaps there is just a struggle here in being scholarly - in other words, the sources and academia themselves are inherently biased. Well this must be true, hedge fund managers are educated, and they are educated by people who advocate for the principles that underlay hedge funds, thereby encouraging their existence in the system. So naturally those people who are educating are also writing the textbooks, or the articles, or both, etc, which are then referenced here as scholarly, reliable sources.
This article is pretty important and people will be coming here much more often as time goes by.
Azadismind ( talk) 23:48, 22 June 2011 (UTC)
"A hedge fund is a private investment fund that participates in a range of assets and a variety of investment strategies intended to protect the fund's investors from downturns in the market while maximizing returns on market upswings."
What about long-only funds? The sentence appears to display a belief that a hedge fund must use hedging, which is not the case. HedgeFundBob ( talk) 05:26, 7 July 2011 (UTC)
Thanks Westmorlandia, good comments. The solution is to go by reliable sources per Wiki policy. Here is how the term, hedge fund, is defined:
"When it comes to investing directly in hedge funds, institutions seem to take comfort in managers with the size and infrastructure to mitigate reputational risk and with some ability to make tactical asset-¬allocation decisions," says Girish Reddy, co-¬founder and managing partner of $6 billion, New York-based fund-of-hedge-funds firm Prisma Capital Partners. The importance of brand-name recognition is evident in the Hedge Fund 100, where the five largest firms - Bridgewater, J.P. Morgan Asset Management, Man Investments, Paulson & Co. and Brevan Howard Asset Management - managed a staggering $221.6 billion in combined assets when this year began. That's nearly as much as the $260 billion in total assets that all the firms in the Hedge Fund 100 managed a decade ago in our inaugural ranking. All told this year's 100 biggest firms managed a total of $1.21 trillion at the start of this year, up 12 percent from the $1.08 trillion in assets that the firms on the 2010 Hedge Fund 100 had. What remains to be seen as the hedge fund brand wars unfold is whether managers will be able to deliver the kind of consistent, noncorrelated investment returns that investors have come to expect. Size has not always been kind to hedge fund firms. Managers that have risen to the top of the Hedge Fund 100 (think Farallon ¬Capital -Management and ¬Goldman Sachs Asset ¬Management) have had a tendency to fall down again.----Euromoney Institutional Investor, “Hedge Fund100: Big Firms Strive to Earn Trust and Dollars of Insitutional Investors, Iogen Rose-Smith, May 2011 -- — Keithbob • Talk • 20:54, 7 September 2011 (UTC)
Back in March, I worked with a couple of other editors on this page to write a new introduction section ( that conversation here). The resulting version was much more complete and accurate. (Side note: as I disclosed at the time, I have a vested interest in the topic.) In the months since, the section has changed considerably, unfortunately introducing outdated and inaccurate information. Here are some problems with the current version:
One way or the other, all of the above needs to be fixed. I suggest returning to the version from April 27, which was had clear consensus and would be an improvement. On a related matter, the second two paragraphs of that version still exist, though they have been moved down to the "Description" section. I think it makes sense for those to be in the introduction. This is how they were intended, and hedge funds are a big enough topic that a single short paragraph is not quite enough. Can we find consensus make this change? Bryant Park Fifth ( talk) 13:39, 31 October 2011 (UTC)
Thanks AWhiteC, I appreciate your interest and involvement, although I'm afraid the current introduction is still inaccurate and also too short. I'll ennumerate them, first in the lead and then in the new material in "Description":
As others have been bold, I'm going to be bold myself and change the top of the article back to what it was in late April. That version then had the support of Banaticus (who I invited to discuss here, and made some changes to the article yesterday) and another editor. If there are concerns about the version I am about to restore, I am more than willing to discuss them here. My goal here is to find agreement on a version of this introduction that is accurate and satisfies the requirements of WP:LEAD. Thank you. -- Bryant Park Fifth ( talk) 19:27, 1 November 2011 (UTC)
Hello again Westmorlandia, thank you for your response and apologies for my delay in replying to you. The wording of the sentences on open-endedness and the NAV statement based on your recent edits appear fine to me.
You noted that you would "not object" to re-adding the sentence on 61% of investment in hedge funds being from institutional sources; I believe this should be included in the introduction and wonder if you would mind adding it to the third paragraph, as you suggest?
Also, looking at the current introduction, I see that you have made an edit to amend the wording on management fees. Here, I wonder if a compromise between the new wording and the original could be made:
Thank you. Bryant Park Fifth ( talk) 16:24, 30 January 2012 (UTC)
I have issues with this paragraph in the current lead:
It is not encyclopedic to say what the subject is not. Or to describe it by saying how its different from something else. We just say what it is. Therefore the sentence about mutual funds should be removed IMO. Thoughts from others?-- — Keithbob • Talk • 16:28, 4 November 2011 (UTC)
I'm sorry to have to say this, but the section on Systemic risk (under Debates and controversies) is propagandistic, and needs to be made more NPOV. My reasons for saying so are as follows.
The hedge fund industry is a risk to the financial system, and it's not just me saying that. I therefore propose that the Systemic risk section be rewritten to be more neutral in tone. AWhiteC ( talk) 22:25, 1 December 2011 (UTC)
Bryant Park Fifth, you seem to be reluctant to state the nature of your connection to the MFA, which I understand is the main advocacy outfit for hedge funds. Can I just ask a simple question, because it is important: are you remunerated in any way to edit Wikipedia in connection with the hedge fund industry?
I have been thinking about our points of disagreement, and I think I have found ways to work towards resolving them, as follows.
Hey, guys, I'm here from the 3O board. It looks like this is a pretty complex issue, so forgive me if I take some time to look into it in more depth. If I don't respond in 24 hours, please feel free to post a message to my talk page, asking me what's going on, or just relist it on the 3O board for someone else to take; whichever is your preference. stricken, see response below
In the meantime, let me just say that I think Bryant's disclosure of his COI is quite reasonable and forthright. Really, all we need to know is that he has one, so we can submit his views to the greater scrutiny they deserve. At first glance, I don't see any problem with his edits, so unless you have a complaint about a specific edit (or edits), we don't really need to go into any more detail, so let's not press him for any more information on it. Such demands could could be interpreted as veiled accusations, but I for one am perfectly willing to assume good faith on them if they don't continue. Finally, I'd just like to commend you on one of the more civil disputes I've seen listed at the 3O board. Thanks! Writ Keeper ⚇ ♔ 23:03, 8 February 2012 (UTC)
Okay, after looking at the dispute, I tend to agree that AWhiteC's wording would be preferable, but I think you, Bryant, are disagreeing because of a misunderstanding of the text. For the "herd behavior" issue, read it closer: you've quoted it "Systemic risk is increased in a crisis if there is 'herd' behavior," but the text in the article says, "Systemic risk is increased if in a crisis there is "herd" behaviour." I think that "if" in there brings it more into line with what you were thinking. The "leverage" language is similar; it "can lead" to liquidations and illiquidity "can be" an amplifier; the article does not say that either of them definitively cause these effects, only that they can. Really, the language in the entire section seems to me to be quite guarded and cautious (which is exactly how it should be in the dismal science); I don't think there's a need to make it any more so. Finally, for your point about the size of the hedge funds, I actually can't find any particular mention of it in the subsection we're talking about; is it in a different subsection?
Having said all that, let me just add a few notes as a normal editor: it seems to me that the subsection could use a little copyediting love. There's nothing obviously wrong with it, but I think a lot of problems that Bryant is having stems from the layout of sentences and use of punctuation; if they were solved, we might not even be having this discussion. Once I hear back from one of you, I'll start trying my hand at improving it, starting with commas around the dependent clause in the "herd mentality" sentence. Writ Keeper ⚇ ♔ 01:40, 9 February 2012 (UTC)
Although the hedge fund industry is large, hedge funds themselves are individually relatively small in terms of the assets they manage, and operate generally with low leverage, thereby limiting the potential harm to the economic system should one of them fail.((source))
Hello AWhiteC and Writ Keeper, I have gone back to the Mallaby book and he covers the points from the above language in his introduction. On page 12, he writes:
On the same page, he writes:
The "small enough to fail" quote comes from his conclusion, where he states on page 376:
To respond to AWhiteC's point about funds over $100 billion, on re-reading the book's conclusion I noticed that Mallaby states the following on page 390:
He goes on to note there are "nine thousand or so" other funds which are considerably smaller.
These two quotes underline the point that I think should be included here, that the majority of hedge funds are small in comparison to other institutions in the financial sector. Perhaps a further tweak to the suggested addition would help here:
Thanks, Bryant Park Fifth ( talk) 14:29, 14 February 2012 (UTC)
"Financial writer Sebastian Mallaby has said that hedge funds tend to be " small enough to fail", since most are relatively small in terms of the assets they manage, and they usually operate with low leverage, thereby limiting the potential harm to the economic system should one of them fail."
Writ Keeper, your wording looks fine to me. Thanks, Bryant Park Fifth ( talk) 21:59, 15 February 2012 (UTC)
Writ Keeper, I am happy with your wording. I would just go ahead and make the change. AWhiteC ( talk) 19:33, 16 February 2012 (UTC)