Nov. 2 (Bloomberg) — You promised investors 15 percent, 20 percent, 25 percent returns. You took their money, subtracted your 2 percent fee, cranked up the spreadsheet and rolled your balls on the global roulette wheels.
And now, Mr. or Ms. Hedge Fund Manager, you have a choice. Hunker down to preserve this year’s meager profits, acknowledging the danger that the money might walk back out the door in disgust. Or take the death-or-glory option, with some big, bold bets in the final two months as you try to rescue your year.
Regulators, who are inclined to view investing in a hedge fund as akin to dancing in a roomful of fireworks with a lighted blowtorch in each hand, have grown increasingly vocal about what they see as excessively dangerous trading behavior.
