Re:Paul Singer, Doomsday Investor
by whatok on Tuesday August 21, 2018 @11:13AM
(#17810295)
What are Elliott's benchmarks?
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There are a number of relevant indices, I've put a link to one below [1]. the short version is that they would probably be categorized as a multi-strategy event-driven manager, and as such would be compared against other similar managers investing in similar strategies (distressed debt, activist, etc). Most hedge fund managers are focused on risk-adjusted returns rather than relative returns and people often use either a sharpe ratio [2] or sortino ratio [3] as a rough proxy in addition to measuring pure absolute returns.
[1] https://www.hedgefundresearch.com/family-indices/hfri [2] http://www.morningstar.com/InvGlossary/sharpe_ratio.aspx [3] http://www.morningstar.com/InvGlossary/sortino_ratio_definit...
Re:Paul Singer, Doomsday Investor
by throwaway5752 on Tuesday August 21, 2018 @11:19AM
(#17810357)
No idea, this is general comment about all hedge funds. I'm not an investor in the fund, but based on a quick search they're a 2/20 fee structure so they better outperform the SPX.
Hedge funds generally do not track benchmarks as the point of them is to provide diversified return streams. Over a specific time window, any hedge fund worth its salt should outperform vs SPX but really shouldn't be month to month.
Re:Paul Singer, Doomsday Investor
by throwaway5752 on Tuesday August 21, 2018 @11:37AM
(#17810526)
Yes, and their long term returns support this. My phrasing was regrettable, but my feeling is that they are doing a post hoc rationalization for what maximizes their profit (or are describing themselves as an amoral agent in a complex system, at best).
Obviously their entire reason for existence is to make money and no one believes anything different. I think that they also provide a valuable service to the markets and that Paul Singer (at least at this stage in his life) sees himself as an activist beyond the investment world.
I don't agree with all of their methods but think that they're a necessary boogieman in order to prevent shareholders from getting ripped off. Definitely the most aggressive in their space and they attract a lot of attention for it but no one ever seems to ask about why these companies were run in such a poor fashion to begin with.