Regulators take note: New research finds mutual fund managers do better, not worse, when they also manage “side-by-side” hedge funds

Mar 15th, 2010 | Filed under: Academic Research, Retail Investing, Today's Post | By:
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Popular mythology often tells the tale of a disgruntled mutual fund manager who strikes out on his or her own and starts a (more lucrative) hedge fund business.  The existing hedge fund community often retorts that mutual fund managers simply don’t have the training (read “short selling”) experience to manage a hedge fund.

Is this just marketing bravado?  Or is it true that mutual fund managers are no good at managing hedge funds.

More importantly for policy makers, does a mutual fund manager do a disservice to their investors by running a hedge fund on the side?  After all, wouldn’t the much lauded “alignment of interests” inherent in hedge fund contracts give the manager an incentive to funnel their best trades and ideas to the “2 and 20″ hedge fund? More…

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  1. [...] Do you want your mutual fund manager to run a hedge fund on the side?  (All About Alpha) [...]

  2. [...] Do you want your mutual fund manager to run a hedge fund on the side?  (All About Alpha) [...]

  3. This is a timely piece that deserves an example.
    Hedge funds are poised to take in more than $200 billion in inflows this year, returning industry assets to near where they were before the economic crisis.
    It’s been over a year and a half since Wayfarer Capital filed a Form D to start a hedge fund.
    Back in vogue, riding some momentum, he should have framework and staff aligned to participate.

  4. [...] AllAboutAlpha.com» Retail Investing Today’s Post » Regulators take note: New resea… [...]

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