Richard C. Wilson's Blog : 7/1/05

Hedge Fund Clones

Cloning Hedge Funds

Hedge Fund Clones are a relatively new type of investment product that is being offered on wall street. These funds try to clone or replicated the investment strategies of hedge funds in hopes of reaping some out-sized returns with minimized fees and lock-up periods for end-clients. While this strategy hasn't been around long enough to have much of a track record interest in the product is growing quickly. The typical fee for hedge fund clones currently being offered are around 1% which is much lower than the flat 2 and 20% fees of hedge funds. (2% flat fee + 20% performance fee).

Firms launching hedge fund clones include Goldman Sachs, Merill Lynch, Morgan Chase, State Street Global, and Deutsche Bank. Most hedge fund clones offered by these firms can be purchased and sold on a daily or weekly basis.

Most of these hedge fund clones are structured as premium indexes. This is why many researchers on the academic and professional side of the investment industry have doubts about the returns that hedge fund clones will produce. Hedge fund clones indexes may be superior to several other indexes in terms of total return but nobody could expect an index to keep up with the returns of the top 20% of hedge funds which is partially what motivates high net worth investments to invest in hedge funds in the first place.

Most hedge fund clones are created using the "factor model approach." This approach creates the hedge fund clones by looking at the performance over the last set period of time such as one year and then figuring out what securities you would have had to hold to achieve those returns. This is an important point to understand as this approach has been criticized as simply creating a similar risk/reward portfolio to hedge funds without any of the diversified asset as nimbly adjusted portfolios of true hedge funds. While most of these hedge fund clone models are updated each month I would venture to say this will speed up to once a week or even more frequently in the near future as the products become more competitive.

For more information on hedge fund clones please see these 3 resources:

- Richard

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Persuasive Writing

Persuasive Writing On HedgeFunds

If was to suggest one book to read on the subject of persuasive writing it would be Psychology Of Influence by Robert Cialdini.

One thing I am finding through earning my graduate degree in psychology is that persuasive writing is key to my own personal growth and success. While I'm learning a lot about how people make decisions and how to ethically influence them I still believe that providing others with something of value first is the most effective way to be persuasive.

This can be done by offering them some useful links online, providing them with a word document or excel spreadsheet that contains valuable information for them, or just asking if they have heard of a recent trend that could affect their career. This can be extremely effective within the hedge fund world, as many people are too busy are too short-time frame minded to offer valuable resources for free.

- Richard

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Motivational Sales Quotes

Motivational Sales Quotes

Motivational Sales Quotes

I am creating this blog entry to capture all of the best sales quotes that I hear while reading books and having discussions with other sales professionals. I will be updating this blog at least once a month with new entries...let me know if you have any great ones. You might see a lot of quotes from Jeffrey Gitomer. He was my inspiration in writing my first book and I will get to meet him this September when he comes to Boston for a seminar workshop.

"The Harder I work the Luckier I get"

“Every morning in Africa a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death. It doesn't matter whether you are a lion or a gazelle -- when the sun comes up, you had better be running.”

The key is not to "call the decision maker." The key is to "have the decision maker call you."

- Jeffrey Gitomer

Master the web and you will master your universe - and your (on-line) bank account."

- Jeffrey Gitomer

When you begin to give value to the world, somehow the people you affect will find a way to tell you. Even if it takes a couple of years.

- Jeffrey Gitomer

"Writing is a key differentiator. I've used it for 14 years. Writing will not just lead to differentiation. Writing is the credibility you need to create buyer confidence"

- Jeffrey Gitomer

"Your job is to meet the right people and read the right books"

- Jeffrey Gitomer

- Richard

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HedgeFundRecruiting.com

I am looking to sell HedgeFundRecruiting.com to someone in the hedge fund industry over the next couple of weeks. I want to sell it for something close to wht a recruiter makes from making one successful placement. This domain name would allow an individual to stand out more from the crowd and be found instantly by professionals and potential hedge fund clients who go online and just type in hedgefundrecruiting.com into their web browser. This could lead to an extra 2-3 hedge fund clients or 9-10 hedge fund professionals working with you each year.

Please make an offer by sending an email to Richard@HedgeFundGroup.org. You may also feel free to mail this to a friend using the button below.

Some of my other website projects include:

- Richard

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