When Performance Doesn’t Matter

One of the most amusing phrases on Wall Street is “smart money.”

 
This phrase is used to describe the handful of professional investors whose abilities and foresight are thought to be so acute that they spot the big moneymaking opportunities before the average Joe Pro.

 
The smartest of the “smart money” is thought to be hedge funds.

 
A look at recent performance suggests that hedge funds are indeed extremely smart money, though not in the way that most people think.

 
In fact on average, hedge funds are no smarter about picking stocks or other investments than anyone else. In fact, they’re decidedly, startlingly worse.

 
Hedge funds are in fact shutting today at a rate not seen since the financial crisis, as many managers post disappointing returns and an elite group of firms dominate money raising.

 

For More: When Performance Doesn’t Matter

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About Ziad K Abdelnour

Ziad K. Abdelnour is President & CEO of Blackhawk Partners, Inc., a New York based private equity ”family office” that focuses on originating, structuring, advising and acting as equity investor in management-led buyouts, strategic minority equity investments, equity private placements, consolidations, buildups, and growth capital financing's in companies and projects based both in the US and emerging markets.