Inside Hedge Funds

Hedge Funds were nemesis during the economic boom cycle, so it’s not clear where they stand during the bust.  Their nature is secretive, their leaders fearless; that they have made so much money and are so misunderstood stokes fear amongst the public.  But I work at a hedge fund, and so do numerous people who do not fuel this angst, and it is us that really understand and grease the wheels of the inner workings at the forefront of capitalism  – and it is here that spectacular success goes hand in hand with spectacular failure.  The story here is not one of the smartest guys in the room, nor one of genius failing.  It does not set out to make the smart guys look dumb – for really the answers to the problems lie in the wider society which allow and encourage this kind of success only to be appalled when it becomes too big.  We don’t begrudge the actors, we forgive the sportsman, and we respect the executive.  All of these millionaires seem to participate in society, they seem to add to it, they form part of institutions that we know and see – and somehow they deserve their riches, but when it comes to finance we can only muse. 

To dabble into its history is to know that banks have only ever lost the profits they’ve made, that fortunes have been won and lost, that madness and the crowds are the very essence of the pits of money men.  That we all fantasize and obsess to some degree about playing for money – even if it’s as innocent as buying a lottery ticket, there exists in society dreams of getting rich quick.  What we don’t realize is that finance is not one of those games.  It is a vicious, bitter and hard survival of the fittest and the people at the top of this game are not just intelligent, they are savvy; beaten into a street smart culture by their peers.  The fat cat trader arrogance is only perhaps a decade gone, and may even be just concealed, but the modern day Hedge Fund Manager is not the Gordon Gecko of the previous generation.  Today they are more cultured, educated, they walk amongst us without us even knowing – some even prefer anonymity.  They don’t even need the fast cars as much as they did.  The globalization of finance has meant that it’s no longer just about ruling the roost at home, but it’s about ruling the roost everywhere.  That the system is so complex is evident in the modern day collapse; we’ve all been had by the smart guys again.