Hedge Fund Cow Paths
The streets in Boston were actually old cow paths that the city decided to just pave over to create the roads of the city. The result, is a very complicated maze of one way streets which really only make sense to the most veteran cab drivers. This is not the cows fault they simply walked typically in the direction of least resistance. The point here is that nobody stepped back and looked at where the cows had wandered and asked if there was a better way to get the project done...they simply followed where cows had walked in the past.
Pagan's point in telling this story was that in every business, every form of marketing and even within the hedge fund business there are cow paths everywhere. Are you and your business wandering around on cow paths of what others have done in the past, or are you building a super highway straight towards your goal?
Areas to examine for hedge fund managers could including hiring, capital raising, employee management, performance reporting, transparency, governance, and investor relations. Our team now often steps back and looks at competitors, other industries, and steps to the work we are trying to complete to see if there is a more direct or efficient way of completing it. Hope this story helps.
- Richard Wilson