Posts Tagged ‘hedge funds’

When Your Investment Portfolio Includes A Striker, A Keeper, And A Few Mid-Fielders

Wednesday, February 16th, 2011

“A group of U.S. investors made an offer to UniCredit SpA, co-owner of AS Roma, to acquire the three-time Italian soccer champion.

They are proposing to pay as much as 130 million euros ($178 million) and are seeking a 50 million-euro credit line for AS Roma from UniCredit after the purchase, Italian newspaper Il Messaggero reported Jan. 28. Movsesian declined to provide details of the offer.

He said it would be “an honor” to buy the team, and revealed it would be “trophy asset” as well as an investment.”

What do you think?

Do you know how much return you could get on a soccer team? Is buying a team more or less risky than buying a stock?

Competitive Culture = Cutting Corners?

Wednesday, November 24th, 2010

U.S. officials have been snooping around and raiding the offices of certain hedge funds recently, and there seems to be a cultural connection between them all…

  • Many of the hedge funds being investigated for insider trading were started by former traders for SAC (a private investment management firm).
  • SAC allow its employees to trade small amounts of company money once they’re hired, and if they do well they’re given more power. If they don’t do well, they get the boot.
  • This competitive culture creates a tension – SAC traders want to succeed professionally but don’t want to join Bernie Madoff in the clink for all eternity. Sometimes, the best intentions can land you there anyway.

Facts & Figures

  • SAC employs 800 people, including 20 lawyers and other nitpickers charged with keeping things in line with regulation
  • Level Global Investors LP and Diamondback Capital Management LLC, two hedge funds started by former SAC traders, were some of the first to be raided by federal agents
  • Richard Choo-Beng Lee, another former SAC employee, pled guilty to insider trading last year

Best Quote

“That eat-what-you-kill culture is highly competitive. A set-up where you have traders running their own portfolios instead of feeding into a centralized investment may make it more tempting for them to cut corners.” – Craig Lilly, an attorney at Greenberg Traurig LLP

Two and Twenty is…

Friday, August 21st, 2009

Two and twenty is a typical fee structure of hedge funds, or other alternative investment vehicles, where the annual management fee is 2% of assets and there is also a performance fee of 20% of investment returns.