A Fund vs. Your Own Money

Quote from sle:

Personally, I'd feel that it's exactly the opposite. The bigger is the capacity, the less of an alpha and more of a beta trade it becomes. There are edges out there that exist for decades simply because of capacity constraints and are simply waiting for someone to harvest them. If anything, ability to generate alpha negatively correlates with size and at some point any sort of fund trading boils down to large beta bets, sometimes smart and sometimes not so much.
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There is a third way.

I'm thinking of some of the larger carries that scale into the hundreds of millions. Basically no beta risk. Some sensitivity to rates.

Opportunity to run the constrained stuff out of the same book, against held inventory.
 
Quote from sle:

Personally, I'd feel that it's exactly the opposite. The bigger is the capacity, the less of an alpha and more of a beta trade it becomes. There are edges out there that exist for decades simply because of capacity constraints and are simply waiting for someone to harvest them. If anything, ability to generate alpha negatively correlates with size and at some point any sort of fund trading boils down to large beta bets, sometimes smart and sometimes not so much.
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edges that exist for decades... ummmm i hope it doesnt take that long for me to find them!
Clues would be great... not effecting liquidy over here with my size :-)
 
Smoker,

What about showing us what pros performances mean ? You know we 'd love to see what these are really.
Out of the 100 allocations you have ( it is 100 right?) , can you put a link where we can see the details records of all these 100 funds performance for 2012 ? not an average of these 100 funds, but something so that we can see the equity curve and other stats/metrics of each fund. It would be interesting to see what it means to be pro in terms of performance.
Obviously having the detail of their trades would be great and very instructive.
Is that possible?
 
Quote from smallStops:

Smoker,

What about showing us what pros performances mean ? You know we 'd love to see what these are really.
Out of the 100 allocations you have ( it is 100 right?) , can you put a link where we can see the details records of all these 100 funds performance for 2012 ?

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I think that's asking a lot to post performance metrics on a public web discussion for anyone - accredited or not - to see. Especially since the HF databases typically charge pretty sizeable amounts to access that info

http://www.barclayhedge.com/products/best-hedge-funds-database.html

You can find sources which index performance for classes of hedge funds, such as hedgeindex.com. MOrningstar used to provide this info to subscribers (a couple hundred $$/yr) who confirmed their accredited status, but I think even they've started charging fees for this.

All that said, if Smoker is able to share, I'd love to see the link too :)
 
Quote from sf631:

MOrningstar used to provide this info to subscribers (a couple hundred $$/yr) who confirmed their accredited status, but I think even they've started charging fees for this.
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I mean now they've started charging separately (and much more, I think) for the alternative investments database - over and above the general Morningstar premium subscription
 
oh well, Smoker link would be really great. I would really love checking out these 100 or so allocated funds. I am sure I would learn a lot.
 
I'll bite. Here's a tiny edge that's lasted for decades. Buy 99 shares of a stock involved in a tender offer with a guarantee that all odd lots will be subscribed. Might make $100/deal if you're lucky, but it fits the definition.
 
but there's a middle ground.

Instead of trying to build a multi billion $$ fund with Inst money why not insterad keep it small and to a selecr few H.N.W. investors. Keep your fund to less than say 20 investoes and $10M. You can stil ltrade from home (as long as you treat it professionally) Best of both worlds?

Minimum investment say $500,000+

I do not agree about scaling up to the highest amount possible for the best results. There's no way a $1b fund can outperform the %'s of a $10M fund.
 
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