Review: Hedgehogging

Being smack in the middle of the hedge fund world I look for good reads on this industry. Barton Biggs, the former Morgan Stanley super star research head, has written a fascinating account of what it is like to raise and manage a hedge fund. It is a well written book, conversational in tone, based more on anecdotes and personal experience than theory and how-to advice. Yet – Biggs still manages to pack the book with plenty of insightful philosophical discussions around various investing styles. Mostly it focuses on interesting stories of what drives fund managers – and those that invest in them. For instance, it is certainly true that if you have had a good track record it will be easier to raise money.  But if you have had too much of a good track run some investors will still withdraw money. One reason for this is that they figure most fund managers get hubris because of their success; they start buying yachts, Netjet leases, and generally think they are better than they are which means they work less than they should. It is, perhaps, a bit short on specific concrete advice for a hedge fund investor – and any expectation of deep insights into what has made Biggs so successful throughout his career will be unmet. Doesn’t matter – his adventures in the hedge fund world is interesting and, even, a lot of fun. I laughed out loud plenty of times throughout the book (but then it does not take much to make me laugh).