One interesting statistic is the divergence in performance by investor class: it seems that some limited partners (LPs, or investors) are much better than others at picking funds. University endowments have been particularly successful, while banks have performed dismally.
Pessimism of the Intellect, Optimism of the Will Favorite posts | Manifold podcast | Twitter: @hsu_steve
Thursday, November 25, 2004
Kings of capital
The Economist has a nice survey on private equity funds (which include venture capital and traditional buyout funds). For those unfamiliar with the details, most funds have a "2 and 20" reward structure, taking a 2% management fee each year and 20% of profits. For example, a $1 billion fund, run by 5 partners, would split $20M per year in fees, and another $20M in "carry" assuming a 10% return on the fund. (Hedge funds work similarly.) No surprise that everyone in finance these days wants to be in private equity or at a hedge fund. Sadly for investors though, private equity and hedge funds often underperform indices like the SP500, even though they take on greater risk. Jon Moulton of Alchemy, a British private-equity firm, is puzzled: “A lot of people in the industry already make several million a year without having to perform. I can't understand why investors haven't put more pressure on fees.”
One interesting statistic is the divergence in performance by investor class: it seems that some limited partners (LPs, or investors) are much better than others at picking funds. University endowments have been particularly successful, while banks have performed dismally.
One interesting statistic is the divergence in performance by investor class: it seems that some limited partners (LPs, or investors) are much better than others at picking funds. University endowments have been particularly successful, while banks have performed dismally.
Subscribe to:
Post Comments (Atom)
Blog Archive
-
▼
2004
(100)
-
▼
11
(51)
- Bretton Woods II and ASEAN summit
- VIX and Black-Scholes
- VIX thoughts
- Inflation: goods vs services
- BusinessWeek on US-China trade
- Japan, China, UK and hedge funds(?)
- Sino-French TTE largest producer of TVs
- Kings of capital
- Minimum length and quantum gravity
- Peg will hold, for now
- University Ave, Palo Alto
- VIX hits low
- China climbing value chain
- UBS FX report
- G20 statements and renminbi peg
- The face of battle in Falluja
- VOIP is here
- Raw Data
- Generalized Turing test
- FX Angst at G20 meeting
- Russia moves to EUR FX basket?
- Dollar Loses Luster in China
- Wal-Mart and US-China trade
- EU vs US labor and productivity data
- String theory and all that
- NYTimes on dollar
- Bounded rationality - case closed
- MSFT and Bounded Rationality
- Quote of the Day
- Genetic basis for race
- Sink or Schwinn?
- Economist on Outsourcing
- Bubble Trouble
- How deep is the pool of suicide bombers?
- Where would we be without them?
- Phishing the next big problem?
- What is Google worth?
- How can the average investor hedge against the dec...
- Bretton Woods II
- FT gloomy about Bush II economic policies
- Whither the Renminbi Peg?
- Whither the Dollar? A trader's view
- Outsourcing vs technological innovation
- Rove's methodology: MoveOn's evil twin
- Interpreting the Election
- Whither the Dollar?
- Income Volatility
- Map of the future
- Looting at Al Qaqaa
- Bounded Cognition
- How to Win Friends and Influence People
-
▼
11
(51)

Labels
- physics (377)
- genetics (302)
- globalization (281)
- finance (268)
- brainpower (265)
- genomics (251)
- technology (237)
- american society (230)
- China (210)
- innovation (193)
- economics (183)
- ai (181)
- psychometrics (172)
- science (166)
- photos (162)
- psychology (158)
- machine learning (145)
- biology (142)
- travel (142)
- genetic engineering (130)
- universities (129)
- higher education (124)
- human capital (119)
- credit crisis (115)
- startups (113)
- iq (106)
- cognitive science (99)
- podcasts (98)
- autobiographical (88)
- political correctness (85)
- politics (85)
- careers (84)
- geopolitics (82)
- statistics (80)
- credit crunch (78)
- elitism (76)
- evolution (75)
- bounded rationality (74)
- quantum mechanics (74)
- gilded age (73)
- talks (72)
- income inequality (71)
- social science (71)
- genius (70)
- history of science (66)
- caltech (64)
- realpolitik (63)
- books (62)
- MSU (59)
- mma (57)
- sci fi (57)
- harvard (54)
- biotech (53)
- silicon valley (53)
- academia (51)
- mathematics (51)
- kids (50)
- education (49)
- bgi (48)
- history (48)
- intellectual history (48)
- cdo (45)
- derivatives (43)
- neuroscience (43)
- behavioral economics (41)
- jiujitsu (41)
- literature (41)
- physical training (39)
- video (38)
- computing (37)
- ufc (37)
- bjj (36)
- bubbles (36)
- film (36)
- mortgages (36)
- google (35)
- expert prediction (34)
- many worlds (34)
- affirmative action (33)
- hedge funds (33)
- economic history (32)
- nuclear weapons (31)
- race relations (31)
- security (31)
- black holes (30)
- quants (30)
- von Neumann (30)
- efficient markets (29)
- feynman (29)
- foo camp (29)
- movies (29)
- sports (29)
- music (28)
- singularity (26)
- entrepreneurs (25)
- housing (25)
- obama (25)
- subprime (25)
- berkeley (24)
- taiwan (24)
- conferences (23)
- epidemics (23)
- venture capital (23)
- athletics (22)
- meritocracy (22)
- quantum field theory (22)
- ultimate fighting (22)
- wall street (22)
- cds (20)
- internet (20)
- blogging (19)
- scifoo (19)
- gender (18)
- goldman sachs (18)
- new yorker (18)
- cryptography (17)
- dna (17)
- freeman dyson (17)
- smpy (17)
- treasury bailout (17)
- university of oregon (17)
- algorithms (16)
- japan (16)
- personality (16)
- privacy (16)
- autism (15)
- christmas (15)
- cosmology (15)
- happiness (15)
- height (15)
- oppenheimer (15)
- Fermi problems (14)
- fitness (14)
- les grandes ecoles (14)
- social networks (14)
- wwii (14)
- chess (13)
- government (13)
- hedonic treadmill (13)
- india (13)
- neanderthals (13)
- probability (13)
- russia (13)
- war (13)
- aspergers (12)
- blade runner (12)
- malcolm gladwell (12)
- net worth (12)
- nobel prize (12)
- nsa (12)
- philosophy of mind (12)
- research (12)
- Einstein (11)
- entropy (11)
- geeks (11)
- harvard society of fellows (11)
- string theory (11)
- television (11)
- Go (10)
- ability (10)
- art (10)
- climate change (10)
- cold war (10)
- football (10)
- italy (10)
- mutants (10)
- nerds (10)
- olympics (10)
- pseudoscience (10)
- complexity (9)
- crossfit (9)
- democracy (9)
- encryption (9)
- energy (9)
- eugene (9)
- flynn effect (9)
- france (9)
- james salter (9)
- pop culture (9)
- turing test (9)
- alan turing (8)
- alpha (8)
- data mining (8)
- dating (8)
- determinism (8)
- games (8)
- keynes (8)
- manhattan (8)
- pca (8)
- philip k. dick (8)
- qcd (8)
- quantum computers (8)
- real estate (8)
- robot genius (8)
- success (8)
- usain bolt (8)
- Iran (7)
- aig (7)
- ashkenazim (7)
- basketball (7)
- environmentalism (7)
- free will (7)
- fx (7)
- game theory (7)
- hugh everett (7)
- new york times (7)
- paris (7)
- patents (7)
- poker (7)
- simulation (7)
- tail risk (7)
- teaching (7)
- volatility (7)
- anthropic principle (6)
- bayes (6)
- class (6)
- drones (6)
- godel (6)
- intellectual property (6)
- markets (6)
- nassim taleb (6)
- noam chomsky (6)
- prostitution (6)
- rationality (6)
- academia sinica (5)
- bobby fischer (5)
- econtalk (5)
- fake alpha (5)
- global warming (5)
- information theory (5)
- iraq war (5)
- kasparov (5)
- luck (5)
- nonlinearity (5)
- perimeter institute (5)
- renaissance technologies (5)
- sad but true (5)
- software development (5)
- vietnam war (5)
- warren buffet (5)
- 100m (4)
- Poincare (4)
- bill gates (4)
- borges (4)
- cambridge uk (4)
- censorship (4)
- charles darwin (4)
- creativity (4)
- demographics (4)
- hormones (4)
- humor (4)
- inequality (4)
- judo (4)
- kerviel (4)
- microsoft (4)
- mixed martial arts (4)
- monsters (4)
- moore's law (4)
- solar energy (4)
- soros (4)
- trento (4)
- 200m (3)
- babies (3)
- brain drain (3)
- charlie munger (3)
- cheng ting hsu (3)
- chet baker (3)
- correlation (3)
- ecosystems (3)
- equity risk premium (3)
- facebook (3)
- fannie (3)
- feminism (3)
- fst (3)
- intellectual ventures (3)
- jim simons (3)
- language (3)
- lee kwan yew (3)
- lewontin fallacy (3)
- lhc (3)
- magic (3)
- michael lewis (3)
- nathan myhrvold (3)
- neal stephenson (3)
- olympiads (3)
- path integrals (3)
- risk preference (3)
- search (3)
- sec (3)
- sivs (3)
- society generale (3)
- supercomputers (3)
- systemic risk (3)
- thailand (3)
- alibaba (2)
- assortative mating (2)
- bear stearns (2)
- bruce springsteen (2)
- charles babbage (2)
- cloning (2)
- computers (2)
- david mamet (2)
- digital books (2)
- donald mackenzie (2)
- drugs (2)
- eliot spitzer (2)
- empire (2)
- exchange rates (2)
- frauds (2)
- freddie (2)
- gaussian copula (2)
- heinlein (2)
- industrial revolution (2)
- james watson (2)
- ltcm (2)
- mating (2)
- mba (2)
- mccain (2)
- mit (2)
- monkeys (2)
- national character (2)
- nicholas metropolis (2)
- no holds barred (2)
- offices (2)
- oligarchs (2)
- palin (2)
- population structure (2)
- prisoner's dilemma (2)
- skidelsky (2)
- socgen (2)
- sprints (2)
- twitter (2)
- ussr (2)
- variance (2)
- virtual reality (2)
- abx (1)
- anathem (1)
- andrew lo (1)
- antikythera mechanism (1)
- athens (1)
- atlas shrugged (1)
- ayn rand (1)
- bay area (1)
- beats (1)
- book search (1)
- bunnie huang (1)
- car dealers (1)
- carlos slim (1)
- catastrophe bonds (1)
- cdos (1)
- ces 2008 (1)
- chance (1)
- children (1)
- cochran-harpending (1)
- cpi (1)
- david x. li (1)
- dick cavett (1)
- dolomites (1)
- dune (1)
- eharmony (1)
- escorts (1)
- faces (1)
- fads (1)
- favorite posts (1)
- fiber optic cable (1)
- francis crick (1)
- gary brecher (1)
- gizmos (1)
- greece (1)
- greenspan (1)
- hypocrisy (1)
- igon value (1)
- iit (1)
- inflation (1)
- information asymmetry (1)
- iphone (1)
- jack kerouac (1)
- jaynes (1)
- jazz (1)
- jfk (1)
- john dolan (1)
- john kerry (1)
- john paulson (1)
- john searle (1)
- john tierney (1)
- jonathan littell (1)
- las vegas (1)
- lawyers (1)
- lehman auction (1)
- les bienveillantes (1)
- lowell wood (1)
- lse (1)
- machine (1)
- mcgeorge bundy (1)
- mexico (1)
- michael jackson (1)
- mickey rourke (1)
- migration (1)
- money:tech (1)
- myron scholes (1)
- netwon institute (1)
- networks (1)
- newton institute (1)
- nfl (1)
- oliver stone (1)
- phil gramm (1)
- philanthropy (1)
- philip greenspun (1)
- portfolio theory (1)
- power laws (1)
- pyschology (1)
- randomness (1)
- recession (1)
- sales (1)
- singapore (1)
- skype (1)
- standard deviation (1)
- star wars (1)
- starship troopers (1)
- students today (1)
- teleportation (1)
- tierney lab blog (1)
- tomonaga (1)
- tyler cowen (1)
- venice (1)
- violence (1)
- virtual meetings (1)
- war nerd (1)
- wealth effect (1)

No comments:
Post a Comment