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February 07, 2007


good stuff. you're crackin me up


I know this post is meant to be humorous, but a hedge fund that only trades the equity of other hedge funds isn't necessarily's relatively in-line with what's already going on privately (whether it's ridiculous on an absolute level, well that's a matter of opinion).

If you think of a traditional Fund of Funds (of which there are thousands) as being in the LP business (investing in funds), then a FoF in the GP business (investing in the equity of funds) is not that different (of course many FoF's group already do private investment in GP equity, aka seeding new funds). In many ways trading public equity in HFs is a more attractive business than the private LP business (which is burdened with onerous terms, lack of transparency, etc etc)...or the private GP business for that matter. There are two problems: 1) there aren't that many public funds to trade (at least not in the US) and 2) valuation. Issue 1 will change over time, but the main problem is always going to be valuation (and that's where a FoF trading public equity would claim "alpha"). With regard to valuation, at 40x earnings, Fortress does seem pretty ridiculous.


"NYSE's...neutron-bomb strategy of removing people and leaving the exchange intact is progressing. With a publicly traded stock and the protection from the trade-through rule, they’ll soon put their own capital up and profit almost every time someone else trades."

I haven't been following this - what have they been doing and how could they make this extra money? Could you explain please Andy?


I believe Andy's neutron-bomb comment may pertain to the controversy surrounding ex-CEO Richard Grasso's deferred compensation:


Sounds good, i'm in the process of starting my own also, but mine is going to be 100% automated across all global stocks, futures, equities, forex, etc, basically any random instrument. I'm new at all of this, but i do want to collaborate, drop a note.


I'm actually in the process of starting a publicly traded hedge fund a la pink sheets, with liquidity for investors without the regulatory costs of being a reporting company.

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