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Guide to Hedge Funds
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Guide to Hedge Funds

What they are, what they do, their risks, their advantages

Philip Coggan
Bloomberg Press, 2008
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Recommendation

This brief handbook offers a concise, highly readable introduction to the controversial subject of hedge funds. Philip Coggan demystifies these complex, generally unregulated investment vehicles. He identifies the major hedge-fund investment styles, lists some of the most important hedge funds and explains how they work. He elucidates some of the darker corners of the hedge-fund world, providing one of the most comprehensible accounts yet written of its risks and regulatory challenges. getAbstract recommends this book to readers who have a basic acquaintance with the language and concepts of finance and investment, and who seek an unbiased, objective introduction to hedge funds.

Summary

The Hedge-Fund World

Hedge-fund managers are Wall Street’s new public paradigm: the money manipulators who take home the big profits. Mostly male, the managers of hedge funds have proven their power to change the value of currencies, rattle company managers, crash markets and make enormous amounts of money while doing so. Twenty-five hedge-fund managers shared $14 billion in total compensation in 2006, and the three most highly compensated earned $1 billion or more apiece. Moreover, they make that much even though they turn away investment money. The best hedge-fund managers are quite selective about whose money they manage. Indeed, having money with one of the funds at that level is a status symbol that confers bragging rights.

Hedge funds have grown more important in the financial system while they have taken on functions that used to belong exclusively to banks, insurance companies, pension funds, mutual funds and so forth. Yet, most hedge-fund managers have a casual, sartorial style that seems out of keeping with their eminence, and that is much more laid-back than the power-suited bankers of the 1980s. Unlike the old “Masters of the Universe” about whom novelist...

About the Author

Philip Coggan writes the “Buttonwood” column for The Economist, where he is also capital-markets editor.

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