Are you really a hedge fund in that you actively hedge your positions or are you just an actively traded long-mostly fund that calls themselves a hedge fund because it's a trendy label? What benchmark do you compare yourselves to? Are you sure you haven't outperformed the market simply because REITs have been such a strong asset class since 2010? It's extremely unusual for any actively managed funds to consistently beat their benchmarks net of fees, and those that do, typically have no problem attracting huge amounts of capital (to the point where they lose their ability to outperform). A Random Walk Down Wall Street by Burton Malkiel [http://fave.co/29ZnkN6] is a fantastic book for anyone who wants to learn more about why this is.
I don't want to get in a debate about what a hedge fund is, but while the term "Hedging" is the practice of reducing risk, the goal of most hedge funds is to maximize ROI. The term hedge fund comes from the historical tendency of the first "hedge funds" to hedge against the downside risk of the market by shorting the market (as where mutual funds can not usually take a short positions). In today's terms, hedge funds employee many different investment strategies so it isn't accurate to say hedge funds just hedge risk. Hedge fund managers usually make speculative investments and can sometimes carry more risk.
The funds is bench marked to Credit Suisee HF Index, Citibank Prime +5%, S&P 500. It is beating the bench mark since inception and that historical statement is verified by our auditors. Your point regarding "attracting huge amounts of capital" holds true when a fund reaches a certain size, typically greater than $120M, getting to that point is where a lot of the work happens. The point from start to autonomous growth must be managed with extreme care and diligence, it is imperative that a growing fund manages their growth to not try and grow faster than their operations can support. -- Which is what I'm asking HN, I am soliciting opinions and experiences from smart people, maybe growth hack is the wrong term.
I agree that as a fund grows it definitely gets harder to scale, and at this time, we haven't begun to scale at our full potential, so that point remains in the central view of the risk committee.
so in the parent thread, i've learned more about hedge funds than i knew before, and i certainly formed a favorable opinion of the fund discussed here. So i'll reiterate a prior post's suggestion regarding education. Beyond ignorance though, there's a clear bias that perhaps you ought to target. the HN community seems to me, to be very clever, fiscally conservative, and highly skeptical. I'm certainly the latter two.
Also, i suspect that a large fraction (easily double digit is my guess) of HN readers are accredited investors. Despite these attributes, knowledge you take for granted might be lacking. In my case, i lack a basic fluency in what a hedge fund is as well as a knowledge of a few simple rules to distinguish legitimate ones from those that (likely) aren't.
Without this knowledge, what i know about hedge funds is what i read on HN and that is usually unfavorable (setting this thread aside). So for instance, i recall reading that Ellen Pao's husband is a manager of hedge funds of sufficient reputation to attract more than $100 million from municipal pension funds, but is now bankrupt and declared a ponzi scheme by the bankruptcy judge.
Again, not to disparage hedge funds, rather just to emphasize that these are exotic instruments that very few have any idea how they work, and so there's nothing to mitigate the highly negative association caused by the alarmingly frequent instances of massive fraud orchestrated with hedge funds.
clearly it's not logical--everyone knows what a "hedge" is and they know what a "fund" is, but put those two words together and they metastasize into an term with a strongly reinforced negative connotation.
> I don't want to get in a debate about what a hedge fund is, but while the term "Hedging" is the practice of reducing risk, the goal of most hedge funds is to maximize ROI.
So you're not a hedge fund.
>The funds is bench marked to Credit Suisee HF Index, Citibank Prime +5%, S&P 500.
I'm no hedge fund expert, especially ones based out of Canada, but I think it's based on the fee structure. Hedge funds typically get 2% AUM and 20% of the return. I don't see any reason to think that isn't the case.
Those funds make sense to me for a real estate focused hedge fund that is primarily used in retirement accounts.
