Behind the Money
Hedge fund pioneers face signs of a reckoning
Feb 21, 2024
Billionaire financier Ken Griffin discusses cracks in the hedge fund sector as Citadel's success faces challenges. The episode explores the rise of multi-manager hedge funds, fundraising struggles, high returns, high costs, market risks, and future scenarios for hedge funds amidst higher interest rates and investor preferences.
16:36
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Quick takeaways
- High fees in multi-manager hedge funds require strong performance to justify costs, posing risks for investors.
- Crowded trades and increased competition threaten the future success of multi-manager hedge funds, emphasizing the need for performance.
Deep dives
Bobby Jane's Career Change and the Rise of Multi-Manager Funds
Bobby Jane, a prominent hedge fund executive, decided to leave his successful career at Millennium Management to start his own firm, Jane Global. He aimed to launch a multi-manager hedge fund, a growing and profitable sector in the hedge fund industry. However, Jane faced challenges in raising funds, with his original target falling short. This situation reflects a larger trend of slowing performance among multi-manager funds, indicating a potential end to the boom times in the sector.
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