Incentive structures encourage unscrupulous hedge fund managers to invest in strategies with a high probability of modest gains and a low probability of huge losses in any period. Eventually the low probability disastrous event will occur but by then the manager has grown fat on his 2:20 fees and no system of clawback exists for the repayment of losses. Hedge funds essentially are a scam.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment