Hedge Fund News From HedgeCo.Net

Hedge-Fund Growth and Tax Arbitrage

June 12, 2017 : Permanent Link

(Bloomberg) Everyone knows the stereotypical way that hedge funds work: You start a little hedge fund, raise a little money, and go invest it in your best ideas. Those ideas do well and you have good returns. You then market your fund based on those returns, and raise a lot more money. Now you have a big hedge fund, and you invest it in your best ideas, but also your second- and third-best ideas, because there is no room in the best ideas for all the money.

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