Photo: flickr: garryknight
One of my colleagues recently wrote about a hedge fund. And she had the gall to call it a “hedge fund.”
The firm objected – at first directly, and then via its outside PR representative. It wanted to be called an “activist investor,” saying that it doesn’t short stocks (long-only) and that it charges below-market fees (1 and 20). Neither was terribly compelling, since hedge funds today are more defined by structure/access than by strategy (so long as public equities are involved). The firm also said that it has long been registered with the SEC, but since all of today’s hedge funds are now required to be registered…
Primack points this out as an example of how, all of the sudden, ‘hedge fund’ has become a dirty word. He compares it to what happened to the term ‘leveraged buy-out’ before it was replaced with ‘private equity’.
Fair enough. So call it something else. Let that term go the way of wearing suspenders on the trading floor. But this story brings up another problem, what is a hedge fund?
Primack asked some of his Twitter followers to enlighten him on that question, among them, one of our favourite Tweeps, Josh Brown. So what is a hedge fund people?
- @ReformedBroker A vehicle that turns investor capital into Greenwich real estate
- @fbonnaci Insider Trading for Insiders
- @davepell They are the acorns that become the Oak. Only the oak is made out of plastic and is inflatable.
- @mediainvestors Entity focused on professional gambling using pooled funding typically w/ ST focus on specific publicly traded instruments.
Funny. Leave your definitions in the comments below.