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93,202 Views • Feb 23, 2022 • Click to toggle off description
There are no shortage of people out there offering amazing returns if you invest your money with them and a lot of them are outright scams.
Asking this question can potentially save you for falling for such scams, but in the case of hedge funds or any other investment firm there are three good reasons they get money from investors.
The first reason is that they might not be personally wealthy enough yet to invest into the type of deals they want to. Some private equity deals these days are in the billions.
The second reason is that they can still make more money like this. If someone can beat the market by just a few percent per year then they would make more money by charging a fee to a larger investor.
The final thing is that hedge fund managers do invest their own money. A lot of high profile investors are increasingly choosing to just manage their own money rather than dealing with the stress of demanding investors.
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Views : 93,202
Genre: Education
Date of upload: Feb 23, 2022 ^^
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RYD date created : 2022-03-21T08:30:47.721458Z
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YouTube Comments - 57 Comments
Top Comments of this video!! :3
Hedge fund manager make money not by beating the market but convincing you they can beat the market.
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From what i understand the purpose of a hedge fund is to manage a portfolio with returns that are uncorrelated to the broader market, which these hedge funds can offer to wealthy people who are already heavily invested in the market and are looking for uncorrelated returns in order to hedge their investments, hence the name hedge fund.
Hedge fund managers are not necessarily part of the people for which the service they offer is the most sensible option.
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let's say you have 1 million dollars. You invest and make 20% a year on it. So you earn 200k a year.
let's say you manage a very small fund of 200 million dollars. You collect 1% in management fee = 1 million dollars. Then you return 20% for your investors = 40 million dollars. Of the 40million, you charge 20% as your profit share = 8 million.
As an individual with 1 million invested, your income = 200k.
As a fund manager of a small fund of 200million, your income for this year = 1 mill + 8 mill = 9 mill.
200k vs 9mill.
which would you rather?
For the peasants here who think theyre smart because they watch movies about Wall Street, just remember you are part of the sheeple who never get it.
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Better to make money on investments AND charge investors the usual 2 and 20 than to just rely on investments to make money.
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Pretty sure the joker said if you are good at something, never do it for free
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its pretty informative but i steel favore longer videos
i imagine that it wouldnt need to do more resarch to extend this video to like 3 or 5 minutes
but i know
youtube shorts
meh
17 |
The important question is if they are investing their money in the same place they invest your money.
They will go as far to use client money to clear themselves of positions that they expect to do badly (and so does everybody else hence the difficulty selling them).
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some hedge fund also provide different purpose. like fixed income fund. not beat the market, but steady income after retirement
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Cool 😎 makes sense and I can see people wondering about this :) spot on short
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just curious
that in one video you said that you rent in San Francisco so then why does your about section points location at Singapore
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Note to self. Start a private equity fund
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Hedge funds make money by investing in things your fiduciary can’t or won’t. They take high risk and get personally involved in ways that manipulate the outcomes of the things they invest in.. this is far apart from what any other managed fund will do or investment company.
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It also depends on what you're after. Hedge funds aren't necessarily for outperforming the market. Lots of hedge funds also try to have returns while also not having the downturns the market has and balancing risks.
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The first two reasons were pointless imo. They invest others people's money because other people aren't good at investing but want the benefits of investing so there is a demand for this service. They supply the demand and make money. Its very simple.
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They make money from fees , the more money the more fee they can get from using orher ppls money
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Well that was quick!
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Am hedgefund, can confirm
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Lol hedge fund people normally only lose your money not there
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Forgot the most important reason
Paying Warren Buffet $1 million when the S&P 500 inevitably beats my returns charging zero fees to investors :)
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@GeoSebastians
2 years ago
"The goal is to move the money from the client's pocket to your pocket." "Commissions!" ~The Wolf Of Wall Street
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