Hedge Fund Math: Heads We Win, Tails You Lose

Re:Hedge Fund Math: Heads We Win, Tails You Lose by lordnacho on Friday December 23, 2016 @05:44PM (#13247610)

How so? If you're running a widget factory, you can't just close it and open again with the same machines and staff under a new name. Your investors would have good reason to sue you. And in any case you're not paid a proportion of your shareholder's returns.

With a fund, which is a separate vehicle advised by a management company, the fund can be closed with the knowledge (typically code, and who is gonna know if you take that?) kept and used to run another fund.

And it needn't be terribly blatant. If a guy has a reputation as a stock picker, he can do something like open a new fund for another geography or sector.

Investors can be strangely loyal, too.

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Re:Hedge Fund Math: Heads We Win, Tails You Lose by lisper on Friday December 23, 2016 @08:04PM (#13248083)

> you can't just close it and open again

Actually, you can if you declare bankruptcy.

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Re:Hedge Fund Math: Heads We Win, Tails You Lose by lordfoom on Saturday December 24, 2016 @04:38AM (#13249193)

You just pick up the factory, set it up in a different part of the world, and start it up again?

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Re:Hedge Fund Math: Heads We Win, Tails You Lose by twic on Saturday December 24, 2016 @12:32PM (#13250699)

You don't even have to move it. You can set up a pre-pack insolvency, then buy up the business - assets, employees, stock, everything - in a new company and just keep going, but without the debt. There have been some scandals about business owners doing this, but I don't think it's been entirely effectively stopped.

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