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Daily Worker Demands Excellence From Hedge Funds

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Yesterday, CNBC offered us the unwelcome news that CEOs are going to have to start earning their keep (moral and performance accountability if you can believe that) if they want to stay in the good graces of their shareholders and in their jobs. Today, New York Times columnist (and probable communist) David Leonhardt basically tells us the same thing (for the purpose of this post), vis-a-vis hedge funds: shape up or ship out. But he doesn't just want the average hedge funds to just improve their returns, he wants them to improve them to insanely high, going to happen when small-mouthed-bass-rule-the-earth levels.
Leonhardt is losing sleep over a 2 and 20 and the fact that, "in a good year, a fund's managers bring in stunning amounts of money, and in a bad year, they still do very well." He has a problem with hedge fund people not being served a hard dose of reality (no paychecks for you) when they fail to be anything but flat (like the average have for the last several years). Leonhardt is taking out a campaign against the combination of extraordinary pay and ordinary performance. Raymond T. Dalio, who made $350 million last year after his fund, Bridgewater Associates earned a net return of less than 4% (in '05 and '06) should fry. Goldman, raking in the fees despite its flagship hedge fund losing 6% in 2006 should be torched to the ground.
All of this malarky serves to get Leonhardt riled up and brings him to the conclusion that today's hedge fund managers are only worth it "if they deliver the sort of performance that Mr. Simons has." That's right: you're not worth jack unless your top guy matches Papa Bear's personal $1.7 billion/year. If you can't do that, wind things down and put in an application at Kinkos. (It may be of interest to note that Mr. Leonhardt was an applied mathematics major at Yale, which could account for some, though not all, of his quazy quant ideas).
It seems like everywhere we turn, we're being told to try and be better, to try and be the best, to try and be more like your brother, Noah (stop yelling at me!). We can't speak for Tom Hudson, but, to us, this seems to be asking too much.
Worth a Lot, but Are Hedge Funds Worth It? [NYT]



It Took A Baby Hedge Fund To Demand That Etsy Behave Like A Grown-Up

Black-and-White Capital is frankly stunned that this shit has gone on this long.