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GS Alpha fund down 26%
- Thread starter minitrade
- Start date
Nope, they're better on average: equity index like returns with way lower volatility of returns.Quote from zdreg:
are you saying that the risk adjusted returns of hedge funds are less than buy and hold strategy after all expenses?
Equities (historically) tend to deliver terrible risk adjusted returns: decent ROR% coupled with roller coaster like volatility.
Not true - they were up 50% in 2005.
Lost 9% in 06 and looking at 26% off for 07 YTD.
Lost 9% in 06 and looking at 26% off for 07 YTD.
Quote from makloda:
It really seems Alpha's strategy has deep underlying difficulties. If they can't turn 2007 around this will be their 3rd consecutive year in the red, I don't think they can blame market conditions. I believe they returned 100% net of fees from 1999-2004 but I guess now it's time to call it a day and return the money to all outside investors.
Quote from makloda:
[B
The typical HF investor is looking for a) positive monthly/quarterly/annual returns regardless of the performance of the strategies' underlying markets (e.g. equities, commodities, currencies etc.) b) low volatility of returns. [/B]
You are right but its fairly easy to generate this kind of performance, sell puts on the Index until you blow up and charge 2 and 20 until you do.
Also come up with some bullshit "strategy" to convince people that you are doing something clever.
Quote from The Kin2:
The loss was porbably intentional so a different sector could make more money.
That's stretching it.
Look, bottom line is that in the cases of BSC and GS, it really it does not matter. It's Other People's Money, not theirs. So at worst, they feel a reputation loss which they can easily rationalize away due to "abnormal market conditions". Blame it on the market, the housing crash, the Fed, the shady mortgage brokers, etc.
Neither GS nor BSC actually feel any real losses from these fund blow ups. What they do feel is some lost revenue & profits but no real losses. In a couple of years, they will get new funds back up and get new suckers to throw vast amounts of money into them. Rinse & repeat.
Quote from makloda:
It really seems Alpha's strategy has deep underlying difficulties.
I think this piece of news is underscoring your assumption :
Goldman Global Equity Fund Fell 13.9% in Past Year, People Say
By Katherine Burton and Jenny Strasburg
Aug. 13 (Bloomberg) -- Goldman Sachs Group Inc.'s Global Equity Opportunities Fund fell 13.9 percent in the 12 months ended July 31 as its computer-driven trading strategies were disrupted by turmoil in financial markets, people familiar with the hedge fund said.
The fund has more than $5 billion in assets, said the people, who asked not be identified because its performance is private. The MSCI World Index of stocks gained 21 percent including dividends in the same period.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aZ1P4QKP8Mbg&refer=home
Hedge Funds are usually incorporated offshore e.g. in the BVI or Bahamas and therefore are not liable to US taxes. This helps compounding returns.Quote from zdreg:
and that includes taxes? i will bet not since funds never make these adjusments in their performance.
I do not know too much about the US tax system but I believe a taxable event only occurs when asking for a redemption from the fund and re-importing the returns into the US.
Of course nobody would adjust their performance for taxes, since taxes are subject to the specific conditions of the individual/entity investing in the fund. E.g. a university endowment/charity is not liable to any taxes while an individual is etc.