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Cliff Asness Would Be Cheap At Twice The Price

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Real superheroes deliver real alpha. And real alpha doesn't come cheap:

One of the panels today at the “Delivering Alpha” conference is tackling just that question: whether hedge funds can justify the the “2-and-20″ fees they often charge. (The 2% is a management fee and 20% is for performance.)

AQR Capital Management’s Cliff Asness thinks its “a relatively fair number for real alpha.”

“Real alpha is something you can’t get anywhere else,” Asness said. “If you run the number, that is simply worth the 2-and-20.”

Other things that are hard to get anywhere else: things you can't get anywhere else.

Other panelists point out that, while the best money management talent is in hedge funds (as witnessed by Buffett hiring hedge fund managers as his successors at Berkshire), there are a lot of managers in a relatively few strategies, suggesting that alpha is rarer than 2-and-20 fees.

Hedge Fund Fees Totally Worth It, Says Hedgie [WSJ Deal Journal]

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Earlier today, Politico ran a story titled "Can Chuck Schumer win back Wall St. for Democrats?" Apparently the New York Senator recently "embarked on a fence-mending campaign with senior Wall Street executives, many of whom have grown furious with the Democratic party," in a charm offensive that has included "holding private dinners [including one put on by Pershing Square manager Bill Ackman], organizing high-end fundraisers for Democratic candidates and quietly pressing for super PAC donations." According to Politico, "the outreach appears to be working: Hedge fund and private-equity executives have held six different fundraisers for Democratic challengers and senators at Schumer’s request, sources say." Some financial services employees, however, are not so easy. Take Cliff Asness for example. The AQR manager happened to read the piece and here's what he had to say about it: From: Cliff Asness Sent: Tuesday, June 19, 2012 01:08 PM To: AQR lieutenants, other top hedge fund managers Subject: Can Chuck Schumer win back Wall St. for Democrats? Good title question. Only if Wall Street is so f---ing stupid as to defy credulity, honor, and morality. So, yeah, probably. Best line: “Chuck Schumer is pro-business". Yeah, ones that buy him off in explicit crony-capitalism, but he wants to regulate and tax to death ones that don't. Don Corleone was also pro-business. You guys say this stuff with a straight face huh? C p.s. Sorry about the multiple emails, merging lists (though that is probably not the thing that upsets people) While the above response should come as a shock to exactly no one, we don't think Schumer should give up on Asness so easily. The guy just wants to be wooed. Start with some limited edition action figures, add some $700 bottles of wine, and go from there.  You whip out a Mego Elastic Batman, he's listening. You show up with a a matching Captain America shield tattoo but instead of on your forearm it's on your face? He's nominating you for President. You're welcome.

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