Talk:Hedge fund/Archive 3

Definition of "Hedge Fund"
There really needs to be a section, and I would argue that it should be the first section (after the intro), discussing what is meant by "hedge fund." A variety of different definitions have been put forward, with several of them quoted in this 2003 selection (not RS itself, but many of the cited sources are RS). There also have been additional definitions advanced since then, of course, perhaps most notably the SEC's definition in Form PF (page 4 of the glossary, which is page 57 of the PDF, and see also the proposing release and the adopting release). A key point here is that, since the definitions differ, hedge fund statistics often use different definitions and therefore are noncommensurate. John M Baker (talk) 21:24, 22 January 2013 (UTC)
 * The first section of the article should be a Definition or Description of the topic . Excellent suggestion!-- — Keithbob •  Talk  • 17:51, 23 January 2013 (UTC)
 * Come on John, tell is which of those definitions you like, then we can comment on it as we always do. Wildfowl (talk) 18:54, 23 January 2013 (UTC)
 * My point is more that there are a variety of definitions used in writing about hedge funds, and we should discuss that fact. I could provide my own definition, but that would not be to the point.  John M Baker (talk) 16:57, 26 January 2013 (UTC)
 * So, we need to emphasise that the term is ill-defined or has multiple definitions. OK. Next we need to list and summarise well-sourced definitions, or for brevity maybe state what is common to them. Are we making progress? Wildfowl (talk) 23:23, 27 January 2013 (UTC)
 * Yes we should say it has multiple meanings and we should cite a source for that. -- — Keithbob • Talk  • 04:10, 9 February 2013 (UTC)

Improving The legal entity
Last fall I started proposing some updates to the section now called Structure, a section that was almost entirely lacking in citations, and contained some erroneous information. Three sections were updated through this process, however we got stuck on The legal entity (, previous discussion). Since then I've been working on a revised version with a member of WikiProject Finance, User:Pine. The resulting version is in my userspace (see here). It's a bit longer than the current subsection, although we've endeavored to cover the subject accurately and offer a worldwide perspective. Importantly, the section is also now verified with reliable sources. We'd like to invite comment on it before considering updating the article. Pine may weigh in as well, and all feedback is welcome. Cheers, WWB Too (Talk &middot; COI) 21:44, 5 February 2013 (UTC)
 * Seeing no objections after a week, I'm making the changes. --Pine✉ 03:39, 13 February 2013 (UTC)
 * I made strong objections to this section in a thread above and I still have those objections. I told WWB the section needed a rewrite before he/she cited it and that he/she was going about this process backwards. The section is overly long and complex (as is the entire article) This is an article about hedge funds. Its not about the details of various corporate legal structures and sentences like "The general partner serves as the manager of the limited partnership, and has unlimited liability" have no place in this article.  The section could and should be summarized into one or two sentences which says something like:  Hedges fund use a variety of legal structures such as X, Y and Z. We also don't need 1) weasel words like "typically" and "generally" and "may include"  and "Japanese investors prefer"  and "may be" this phrase is used three times in that section and  2) content that explains what terms are not or what something does not do ie "and have no responsibility for management or investment decisions."   3) we also don't need hedge fund consumer targeted text like "which are primarily aimed at US-based, taxable investors" and "are not subject to both entity-level and personal-level taxation". -- — Keithbob •  Talk  • 17:57, 20 February 2013 (UTC)


 * Keithbob, I have several issues with the assertions you make in the above comment, but I really do think you should look again at WP:WEASEL. That term applies to unsupported attributions, but here you seem to be objecting to acknowledging relevant exceptions. WWB Too (Talk &middot; COI) 18:53, 20 February 2013 (UTC)

Here is how WP:WEASEL defines itself (bold added by me) "This page in a nutshell: Be cautious with expressions that may introduce bias, lack precision, or include offensive terms. Use clear, direct language.-- — Keithbob • Talk  • 22:42, 20 February 2013 (UTC)

Improving Open-ended-nature
Hi everyone, I'd like to propose another updated section, in this case the subsection of Structure. My suggested replacement is here: Open-ended nature (proposed). The subsection is currently two paragraphs, but I think one will do, and it can be condensed in part by removing the discussion of NAV per share which is non-essential to understanding hedge funds' open-ended nature. Otherwise the section is much the same, just a bit streamlined so it's more concise and easy to follow, and the claims are now verified with reliable sources. Thoughts? Cheers, WWB Too (Talk &middot; COI) 14:46, 20 February 2013 (UTC)
 * I find it to be overly complicated with weasel wording that appears to be aimed at a consumer audience. With that in mind I've summarized the section in the article and if you have sources that support the current text I'd be happy to add them.--<span style="font-family:Comic Sans MS,sans -serif"> — <b style= "color:#090;">Keithbob</b> • Talk  • 18:25, 20 February 2013 (UTC)
 * Keithbob, did you mean that my version retained existing problems, or that it introduced them? As noted, I believe my goal is broadly sympathetic to yours: to make this less complicated, and provide citations for existing information. Now I see you have reorganized and cut this down substantially, which I think makes this more confusing, not less. One sentence of information about open-endedness is surely not enough. WWB Too (Talk &middot; COI) 18:45, 20 February 2013 (UTC)
 * On a quick reading, I tend to agree with Keithbob. The new version seems overly compact. Also, we need to be very careful about the sources of "factual" statements about funds in general. My experience with journalists and authors of these financial sector practical books is that the writers have very little access to information, which is not public and which sources may have no motive to share.  I think one can find contradictory published sources on just about everything relating to this business.  Also, the highly skewed distribution of AUM over funds means that what is true for "most funds" may not apply to most assets under management.  There's danger of a serious misimpression.  New startups have much less restrictive and investor-friendly terms than the large established successful funds.  Just 2 cents.  Thanks.  SPECIFICO  talk  19:56, 20 February 2013 (UTC)
 * You should have a look at Keithbob's revised version; as of this writing, the two paragraphs have become two one-sentence paragraphs (here), which WP:BETTER aptly discourages: Paragraphs should be short enough to be readable, but long enough to develop an idea. ... One-sentence paragraphs are unusually emphatic, and should be used sparingly. If mine was too compact, the current version is moreso. Regarding skepticism about citations, I'd simply added support for existing encyclopedic material in sources that meet WP:RS standards—including books from large publishers, university-level textbooks, at least one peer-reviewed journal, and the SEC. WWB Too (Talk &middot; COI) 20:27, 20 February 2013 (UTC)
 * I've created a section called 'types of hedge funds'. We don't need a special section to describe what an open-ended fund is, there is a separate article for that, like wise for closed end funds. As I've said numerous times this article is overly long, complicated and complex. My edits are an attempt to address that issue in this section before inappropriate copy gets entrenched with citations. But I'm open to discussion. --<span style="font-family:Comic Sans MS,sans -serif"> — <b style= "color:#090;">Keithbob</b> • Talk  • 22:37, 20 February 2013 (UTC)

Defining the topic
I made some changes to the lead yesterday per reliable sources. I think the lead (and the whole article) needs to be rewritten and am happy to discuss changes here as needed. --<span style="font-family:Comic Sans MS,sans -serif"> — <b style= "color:#090;">Keithbob</b> • Talk  • 19:08, 9 January 2013 (UTC)


 * I saw your changes (in the lead and elsewhere), and they seem good. So good in fact that I tweaked them! Feel free to revert or modify my modifications.
 * Do you have a to-do list for overhauling this article? Wildfowl (talk) 20:44, 9 January 2013 (UTC)


 * I am concerned about two changes in the lead paragraph. First, I think calling a hedge fund a "financial term" before calling it an "investment fund" is more confusing, especially to non-expert readers. Second, using a wide range of investments seeking to "to provide higher than average returns" is not a unique trait of hedge funds. Hence, this version is less accurate than before. The previous language was more detailed, but I don't think it was unclear. Keithbob, I know you're disinclined to roll it back to the previous version, however could you identify your specific concerns about the former lead? WWB Too (Talk &middot; COI) 21:06, 9 January 2013 (UTC)
 * Thanks Wildfowl for your comments and tweaking. I don't have a To Do list but I think article needs some strong copy editing and the application of citations. Your help would be greatly appreciated. Regarding the lead......The first sentence of the article should define the topic and I think getting a clear, well sourced definition in the lead will provide an anchor for this article and act as a touchstone for further editing and development of the article.  I don't think its productive for us to debate our personal take on what the definition of the term is but rather we should assemble sources and then summarize them without using weasel words like: typically, sometimes, usually etc.  Let's compile all our sources in this sandbox which is now linked at the top of this talk page. Then we can discuss and summarize. Thanks!  --<span style="font-family:Comic Sans MS,sans -serif"> — <b style= "color:#090;">Keithbob</b> •  Talk  • 17:35, 10 January 2013 (UTC)
 * Sure, I don't mind putting together sources toward a more accurate lead paragraph. I can do that by early next week.


 * Meanwhile, I think "weasel words" is not quite what you mean. Rather than introducing opinion into the article, words like "typically", "sometimes" and "usually" are, well, sometimes necessary qualifiers to avoid overly broad statements. If something is generally the case but exceptions exist, it would be misleading to say otherwise. That is an issue I see with the current version. I'm all for reducing ambiguity, but not at the expense of accuracy.


 * Relatedly: since you mention citations as a priority, I'd like to note that my suggestions for the section now called Structure (most recent: The legal entity) are primarily focused on correcting and citing existing material. Perhaps that could be part of this process. Cheers, WWB Too (Talk &middot; COI) 18:21, 10 January 2013 (UTC)


 * Listening to you two guys "inspired" me to change the first para to reflect both positions. I added in some "meaning" from the earlier version of the para, and simplified a bit. This will not be the final version, I am sure, but I hope it is a step forward. At least the first para now has citations. Please feel free to edit it or propose changes to it in here. Wildfowl (talk) 23:55, 10 January 2013 (UTC)


 * Hey there, Wildfowl. I think your updated version is a definite improvement. I'd also like to suggest one more change, to the final sentence of the first paragraph. It currently states:


 * Investors in hedge funds include institutions as well as high-net-worth individuals, and some jurisdictions place restrictions on who can invest in hedge funds.


 * Two issues here: it still doesn't convey that investment in hedge funds is limited to a small universe of eligible participants and, having conferred with MFA, we're not aware of any jurisdiction that doesn't restrict who can invest in a hedge fund. So here's a suggested replacement section that incorporates some of the language in the prior version:


 * As determined by regulators, hedge funds are generally only open to certain types of investors, including institutions such as pension funds and university endowments, or high-net-worth individuals.


 * It's not much longer than the current version, and restores the key information about hedge funds' exclusivity. What do you think? WWB Too (Talk &middot; COI) 20:25, 14 January 2013 (UTC)

Thanks everyone for participating and helping to get a sourced, accurate lead that defines the subject of the article. Regarding weasel words, I don't agree with WWB's statement above but rather than have a theoretical discussion, I'll just address the issue when it comes up and I think the sentence above is one example. I think the problem comes in when we try to explain in one sentence every possible circumstance or exception. This is especially troublesome in the lead paragraph which is by definition a summary with minimal detail. Therefore my suggested rewording would be:
 * 'Hedge fund investors must meet the guidelines set by financial regulators]. --<span style="font-family:Comic Sans MS,sans -serif"> — [[User:Keithbob|<b style= "color:#090;">Keithbob''</b> • Talk  • 22:13, 14 January 2013 (UTC)


 * I'm afraid I really don't think that works at all. The sentence is so broad as to effectively mean nothing. After all, every financial organization must comply with regulators. The sentence I proposed above is a general summary of hedge funds' limited universe of investors, which is important to understanding what they're about. I'm curious, do you disagree with my characterization in general or specifics? WWB Too (Talk &middot; COI) 00:14, 15 January 2013 (UTC)


 * I've just had a go at changing that sentence to express the stuff mentioned above by WBB and Keithbob in the minimum number of words. Again, feel free to change it again or discuss further in here. Wildfowl (talk) 18:58, 15 January 2013 (UTC)


 * Hey, that works. Looks fine to me now. Keithbob? WWB Too (Talk &middot; COI) 22:00, 15 January 2013 (UTC)
 * SPECIFICO has edited the sentences under discussion so take a look again. I personally like his edits and the first two sentences as of this writing are OK with me for now--which means they are a good step forward from before but may need to be revised later as we discuss the lead as a whole in the thread below. PS I'm going to invite SPECIFO to join the conversation. --<span style="font-family:Comic Sans MS,sans -serif"> — <b style= "color:#090;">Keithbob</b> • Talk  • 19:28, 16 January 2013 (UTC)


 * SPECIFICO's changes seem positive to me, although his wording is not as minimalist as I would prefer. Wildfowl (talk) 22:16, 16 January 2013 (UTC)


 * I'm generally OK with these changes, and while it does increase the word count, it's a fair tradeoff for being more precise. One question, though, for SPECIFICO: can you point to any jurisdictions that allow investors besides institutional investors and high-net-worth individuals? WWB Too (Talk &middot; COI) 17:27, 17 January 2013 (UTC)


 * I'll name one: the United States.  In the U.S., it's much easier to have hedge funds that allow only institutional investors and high-net-worth individuals to invest, but it's not required if the hedge fund doesn't take performance fees, which some don't.  John M Baker (talk) 20:16, 17 January 2013 (UTC)

John, from my understanding, that caveat is partially correct but also misleading. It's true that under the Securities Act of 1933 (Rule 506 of Regulation D), sales can be made to up to 35 non-accredited investors. These investors would not be qualified clients, which—as you noted—means no performance fee. But such sales are very rare because including even a single non-accredited investor in an offering means the fund would become subject to lengthy disclosure requirements under Rule 502 of Regulation D that would otherwise not apply. Furthermore, Rule 506 requires that these types of investors be "sophisticated"—that is, they must have “sufficient knowledge and experience in financial and business matters to make them capable of evaluating the merits and risks of the prospective investment.”

Given that, perhaps it would be more accurate to say the following:


 * Investment in hedge funds is restricted by regulators. The most common investors in hedge funds are institutions such as pension funds and university endowments, and high-net-worth individuals.

The "most common" qualifier leaves room for the small number of non-accredited investors, but the language also emphasizes that entry into the hedge fund market is generally restricted. Thoughts? WWB Too (Talk &middot; COI) 21:53, 21 January 2013 (UTC)


 * I would say that 'hedge fund without a performance fee' is pretty much an oxymoron. Why bother? Even stipulating that the regulatory factors are as stated above, I think that concern is a bit like trying to find language to describe an albino in the article about zebras.  The albino zebras have stripes just like their brothers and sisters, it's just that they are not visible to the human eye.  For the lede, at least, I think it's better to keep it simple or say something like "Investment in hedge funds is generally restricted..." which gives cover for rare jurisdictional or fund-specific exceptions.  In addition, I would not put institutions ahead of high net worth individuals, because the historical fact is that it was HNW that launched this asset class. To my knowledge HNW still accounts for the greater share of total fund assets. SPECIFICO 23:32, 21 January 2013 (UTC)


 * I'm OK with saying "generally restricted". One note, however, is that institutional investors are currently and have for awhile been the leading type of hedge fund investor. According to a 2012 Preqin report (note: I've put in an unblock request for its site, but for now copy-paste this and go to p. 16: http://www.preqin.com/docs/reports/Preqin_Special_Report_Hedge_Funds_October_2012.pdf 2012), institutional investors represent 65% of hedge fund investors (up from 60% the year before, according to Citi (p. 10)). Based on the current situation and direction, I'd suggest putting institutionals ahead of the HNWs and explain the background in the History section. WWB Too (Talk &middot; COI) 15:12, 22 January 2013 (UTC)


 * Hello, WWB. I’m not familiar with Preqin. I couldn't get to the page at the URL you cited, but at any rate I don't see anything on their site that would suggest Preqin is a WP:RS for such data. Investor identities are not public information. I briefly reviewed the Citi document, which is essentially a marketing publication, and I doubt that it presents an unbiased RS estimate either. I have personal knowledge of the investor composition of a representative sample of the largest hedge funds, and I am confident that the investor base is as I stated. Note, I am not calling funds intermediated by FoF, private banks or the like "institutional" I am referring to investments by pension funds, endowments, and the like. SPECIFICO 15:38, 22 January 2013 (UTC)


 * Hi, SPECIFICO. Preqin is a research company, and regardless of Citi's motives, their success also hinges on correctly understanding the market. Not to be rude, but your personal knowledge falls further short of WP:RS than these published accounts. We're not so far apart here, really, and for the record I'm also defining "institutional" the same as you are. WWB Too (Talk &middot; COI) 16:02, 22 January 2013 (UTC)
 * Hi. No, of course I am not suggesting any content of the article be based on an editor's experience. However my knowledge does help me evaluate sources and their methodology.  Neither of those documents appear to be RS. I know this due to my understanding of the data available to their authors, the biases in the samples they appear to have used, and the business interests of the self-publishers. Cheers. SPECIFICO 16:09, 22 January 2013 (UTC)
 * Well, it's not the first time I've seen RS issues come up around this topic, especially on small details like this. Perhaps these are not the most ideal sources, but they are the best available, they appear intellectually independent of each other, and they agree on this general point. If you have a specific criticism of the methodology of these reports, please do explain. WWB Too (Talk &middot; COI) 16:22, 22 January 2013 (UTC)
 * They're both self published is a simple objective test sufficient to disqualify them. The facts are not public information. The data which they use for their inferences leads to a biased and incorrect estimate. SPECIFICO 16:31, 22 January 2013 (UTC)
 * I would echo this prior comment by SPECIFICO:  "Even stipulating that the regulatory factors are as stated above, I think that concern is a bit like trying to find language to describe an albino in the article about zebras. The albino zebras have stripes just like their brothers and sisters, it's just that they are not visible to the human eye. For the lede, at least, I think it's better to keep it simple or say something like "Investment in hedge funds is generally restricted..." which gives cover for rare jurisdictional or fund-specific exceptions". We are not creating a college text book or a white paper for the hedge fund industry. This is an encyclopedia for everyone of all ages and backgrounds we should keep things straightforward and simple especially in the lead. I vote for a phrase like " "Investment in hedge funds is generally restricted" in the lead. --<span style="font-family:Comic Sans MS,sans -serif"> — <b style= "color:#090;">Keithbob</b> •  Talk  • 16:58, 22 January 2013 (UTC)
 * I think we're all in agreement about that phrase; it's the order of investor types we're discussing here. WWB Too (Talk &middot; COI) 17:05, 22 January 2013 (UTC)
 * In reply to SPECIFICO above, following : Yet WP:SPS says: "Self-published expert sources may be considered reliable when produced by an established expert on the topic of the article, whose work in the relevant field has previously been published by reliable third-party publications." Preqin reports are widely cited by news publications including the WSJ and FT (see Google News). WWB Too (Talk &middot; COI) 17:03, 22 January 2013 (UTC)
 * I'm sorry but PR and marketing, which are routinely used for media quotes, are not reliable sources. If you can define the population of funds and investors for which they attempted to estimate this statistic, describe their methodology, and explain why you believe they have produced unbiased estimates of the population variable, we could all evaluate their assertions. Because the data is not public, it's not appropriate to make what appear to be factual statements about it. SPECIFICO 17:19, 22 January 2013 (UTC)

From what I understand, Preqin is a company that provides research to the financial services industry. You said earlier that you weren't familiar with them until this discussion, so I don't understand your eagerness to dismiss them. In any case, the same point has been made elsewhere. Here's The Economist from December 2012:


 * In recent years institutions have gatecrashed what used to be an asset class catering mainly to super-rich individuals. Nearly two-thirds of the industry’s assets are now drawn from pension funds, endowments like the Nobel Foundation and other institutional investors, up from just 20% a decade ago.

And this from Sustainable Investing for Institutional Investors by Mirjam Staub-Bisang, published by Wiley in 2012:


 * With the financial crisis, the investor breakdown has also changed. Many retail and high net worth investors were so diappointed by the losses in their hedge-fund positions that they pulled out of the asset class altogether. However, the majority of qualified institutional investors and family offices held on to their positions, such that institutional clients are now likely to account for more than half of hedge-fund investors.

It certainly seems to be the case that wealthy persons were once the leading investors, but that has changed. Anyway, I believe our disagreement is simply over which to mention first. Given the above, I think leading with institutional investors is definitely the way to go. WWB Too (Talk &middot; COI) 19:39, 22 January 2013 (UTC)


 * WWB, I appreciate your interest but you're wasting your time on this. The book you cite references none other than you Preqin source. The economist article is unsigned and cites no source for the data, but why don't you email and ask the author to tell you what data and definitions underlie that article?   As I previously mentioned there are individuals who invest through entities, such as the "family offices" cited in your book sources, which should not be counted as institutions. This is the private wealth of and controlled by individuals.  The point is simple.  The information is not publicly available.  In the absence of a thoroughly explained and convincing estimation methodology there is no factual basis for the assertions you cite. SPECIFICO 20:02, 22 January 2013 (UTC)


 * I'm sorry that you're unconvinced, and it doesn't look like we're going to resolve this question between us. Needless to say, I've provided quite a bit of verification and so far you haven't provided anything which says otherwise; I'm afraid your last two suggestions have amounted to encouraging original research, and we both know that doesn't work. At this point, probably best to see what others think, and perhaps even seek a third opinion. WWB Too (Talk &middot; COI) 21:03, 22 January 2013 (UTC)


 * WWB, you say I am encouraging original research content here? That's preposterous. I encourage you to read my comments more closely.
 * Here's the short form: The data is not publicly available. Any statement as to the proportions is therefore based on inference.  Any such inference should be documented as to its facts and methods, with a careful definition of terms.  I have provided my definition of institution, which does not include aggregators of personal funds, to wit family offices, private banks, and the like.  You on the other hand continue to dredge up additional promotional material from parties at interest such as consultants with non-notable resumes and banks.  Then you find a book that quotes the same undocumented statement from your consultant.  Moreover this article has many more serious shortcomings than the one you have raised.  I suggest we move on to more significant areas of improvement. SPECIFICO 23:32, 22 January 2013 (UTC)


 * You're right, we should move on to more significant issues. WWB Too (Talk &middot; COI) 14:28, 23 January 2013 (UTC)


 * May I respectfully suggest that it simply isn't that important whether institutions or high-net-worth individuals are mentioned first, and that considerations other than which group invests more money in hedge funds (e.g., writing flow) perhaps should receive greater consideration. John M Baker (talk) 21:33, 22 January 2013 (UTC)


 * I agree it's a minor point, and readability matters. In my discussion with SPECIFICO, we were agreeing that "generally restricted" was more accurate than "most jurisdictions". Then we disagreed about the list order, and the rest is a gray wall of text. Based on the above, I suggest:


 * Investment in hedge funds is restricted by regulators. The most common investors in hedge funds are institutions such as pension funds and university endowments, and high-net-worth individuals.


 * You might disagree on the first sentence. SPECIFICO will disagree on the second. But I'm optimistic we can find a middle ground. Cheers, WWB Too (Talk &middot; COI) 21:52, 22 January 2013 (UTC)


 * I guess I would say something like, "Investment in hedge funds is subject to regulatory restrictions, which generally limit investors to institutions such as pension funds and university endowments, high-net-worth individuals, and fund managers." I toyed with adding "and occasionally a small number of other sophisticated investors," but I don't think it's a point worth making in the intro.  My point earlier was more directed at the dangers of sweeping statements, rather than arguing that there are significant numbers of non-high-net-worth investors (other than fund managers, who are not necessarily required to meet net worth standards).  John M Baker (talk) 23:00, 22 January 2013 (UTC)


 * John, I like your suggested version. If that's what goes into the article's first paragraph, I'll be satisfied. Cheers, WWB Too (Talk &middot; COI) 14:25, 23 January 2013 (UTC)


 * O.K., I've put that in the article. Specifico, I think it reads better this way, but if you want to change the order to put the high-net-worth individuals first, I don't care.  John M Baker (talk) 14:58, 23 January 2013 (UTC)


 * Hi. Why put "fund managers" in the lede? I don't think it is significant and it sounds as if any fund manager may invest in any fund. Maybe for the lede it should simply say something like "certain classes of sophisticated investors" and then go into the details and regulations in the body of the article.  Certainly in the current form the word order suggests that "high net worth" and "fund manager" are types of institutional investors. SPECIFICO 15:14, 23 January 2013 (UTC)


 * It's a factual statement, since the managers of the hedge fund can invest fairly freely. Under U.S. law, the carve-outs are in Rule 205-3 under the Advisers Act, Rule 3c-5 under the 1940 Act, and Rule 501 of Regulation D.  Also, it's characteristic of hedge funds that managers co-invest with other investors, although often on more favorable terms.  If you want to change the order, be my guest.  John M Baker (talk) 16:01, 23 January 2013 (UTC)
 * Hello JMB. Yes, I'm aware of the rule, but I don't think it's a significant enough fact to justify complicating the lede. In fact, the investments of managers of the fund who do not otherwise qualify may not be significant enough to mention at all. I don't see that it's a material fact. SPECIFICO 16:30, 23 January 2013 (UTC)
 * The lead should be a simple, straightforward and uncomplicated SUMMARY free of details. Per WP:LEAD]] for this reason I support SPECIFICO's suggestion to: simply say something like "certain classes of sophisticated investors" and then go into the details and regulations in the body of the article. --<span style="font-family:Comic Sans MS,sans -serif"> — <b style= "color:#090;">Keithbob</b> •  Talk  • 18:00, 23 January 2013 (UTC)

Summarizing the article in the lead
Food for thought....... these are the major sections of the article (below) Are they adequately and proportionately summarized in the article's lead paragraphs?
 * 1 History
 * 2 Fees and remuneration
 * 3 Strategies
 * 4 Risk
 * 5 Structure
 * 6 Regulation
 * 7 Hedge fund indices
 * 8 Debates and controversies
 * --<span style="font-family:Comic Sans MS,sans -serif"> — <b style= "color:#090;">Keithbob</b> • Talk  • 22:31, 14 January 2013 (UTC)
 * Dunno, but here's what it covers at the minute:
 * Para 1: What they are and who can invest in them.
 * Para 2: Open-endedness and valuation.
 * Para 3: Seeking to profit from rising and falling markets. Manager remuneration. Size of funds and industry.
 * Para 4: Regulation.
 * It seems to me that the key things missing are (1) history, (2) risk, (3) structure. However, I wouldn't want to see the lead much longer than it is already. Surely history isn't necessary in the lead, especially as it is the first main section. Risk does need mentioning. Structure maybe is a bit too technical to go in the lead section. Wildfowl (talk) 19:08, 15 January 2013 (UTC)
 * Good analysis. Except the article is 10,700 words long and deserves a complete, concise lead that at least touches on every major section of the article and I don't see a problem expanding it while sticking to the guideline for 4 paragraphs max. I think there is room for pruning of points being given undue emphasis for example performance and net asset value. --<span style="font-family:Comic Sans MS,sans -serif"> — <b style= "color:#090;">Keithbob</b> • Talk  • 19:33, 16 January 2013 (UTC)


 * I'm not familiar with the full body of the article but I would rank the importance of the four paragraphs currently in the lede as follows: 1,3,4,2. Of the remaining topics covered in the 8 sections of the article, it seems to me that Risk and Strategies might warrant mention in the lede. What's important about history is that HF assets grew rapidly in the second half of the nineties and explosively in the post-2000 period.  What I think is important about risk is that HF is on average less risky than many asset classes but that from time to time there have been spectacular exceptions due to model risk, illiquidity, fraud, and other factors.SPECIFICO 23:40, 16 January 2013 (UTC)
 * OK, I"m going to move the Fees section and place it after the risk section per this discussion.--<span style="font-family:Comic Sans MS,sans -serif"> — <b style= "color:#090;">Keithbob</b> • Talk  • 15:33, 22 February 2013 (UTC)

Regulation section
I'm going to work on the regulation section as it seems overly long and complicated. For example the Dodd-Frank Act, which has its own WP article is mentioned and described numerous times throughout the section: Then.......... there is an entire section devoted to the Dodd-Frank Act
 * These included the U.S.'s Dodd-Frank Wall Street Reform Act[
 * Before the Dodd-Frank Act made registration mandatory for hedge fund advisers with more than US$150 million in assets under management, hedge funds were primarily regulated through their managers or advisers, under the anti-fraud provisions of the Investment Advisers Act of 1940.
 * Under the Dodd-Frank Act, the SEC is required to periodically adjust the qualified client standard for inflation
 * Prior to the requirements of the Dodd-Frank Act, many hedge fund advisers voluntarily registered with the SEC
 * As a result of the Dodd-Frank Wall Street Reform Act, hedge fund advisers with at least US$15 million in assets under management were required to register with the SEC by 30 March 2012; smaller advisers are subject to state registration.[136][137][138]
 * The Dodd-Frank Wall Street Reform Act was passed in the US in July 2010, aiming to increase regulation of financial companies, including hedge funds.[9][54] The act requires advisers with private pools of capital exceeding US$150 million or more in assets to register with the SEC as investment advisers and become subject to all rules which apply to registered advisers by 21 July 2011. Previous exemptions from registration provided under the Investment Advisers Act of 1940 will no longer apply to most hedge fund advisers.[136] Under Dodd-Frank, hedge fund managers who have less than US$100 million in assets under management will be overseen by the state where the manager is domiciled and become subject to state regulation.[136] This will significantly increase the number of hedge funds under state supervision, as the threshold for SEC regulation was previously US$30 million.[147] In addition to US hedge funds, many overseas funds with more than 15 US clients and investors, and managing more than US$25 million for these clients, are to register with the SEC by 30 March 2012.[9] Mandatory registration of hedge fund advisers was supported by the largest hedge fund trade group, the Managed Funds Association (MFA), which announced its support for registration in testimony to a US congressional committee on 7 May 2009. Additionally, Dodd-Frank requires hedge funds to provide information about their trades and portfolios to help regulators fulfill their obligation to monitor and regulate systemic risk. The aim is for this data to be analyzed and shared among regulators – including the newly created Financial Stability Oversight Council – and for the SEC to report to Congress on how the data is being used to protect both investors and market integrity.[147] Under the so-called "Volcker Rule", regulators are also required to implement regulations for banks, their affiliates and holding companies to limit their relationships with hedge funds and also to prohibit these organizations from proprietary trading, and limit their investment in, and sponsorship of hedge funds.[147]
 * If anyone would like to help with this they are welcome to join in.--<span style="font-family:Comic Sans MS,sans -serif"> — <b style= "color:#090;">Keithbob</b> • Talk  • 15:45, 22 February 2013 (UTC)

Market capacity
I'd like to suggest the elimination of the very short, jargon-heavy Market capacity subsection, for the simple reason that it's incoherent. Although filed under the Debates and controversies subsection, it doesn't seem to be that. Indeed, it just doesn't make any sense, and therefore is not helpful to anyone who wants to understand hedge funds. Keithbob, since I know one of your primary goals is to make this article less confusing, what do you think, do you agree this should go? WWB Too (Talk &middot; COI) 19:50, 25 February 2013 (UTC)
 * I think these points are compelling, and I'm going to go ahead and delete it. John M Baker (talk) 23:32, 25 February 2013 (UTC)
 * John, in the future I think it would be appropriate to leave a proposal such as WWB's in place long enough for the rest of us to read and comment on it. I'm sure you realize others may disagree with you from time to time.  In the case of this text, I think it was trying to state something significant, regardless of whether it was an adequate or well-sourced statement on the subject.  Thanks.   SPECIFICO  talk  00:02, 26 February 2013 (UTC)
 * Thanks, John. SPECIFICO, I'm sure whomever added this intended to say something, but I'm afraid they didn't succeed. Best, WWB Too (Talk &middot; COI) 12:57, 26 February 2013 (UTC)
 * SPECIFICO, it's WWB Too's policy to bring all changes up on the talk page, because he doesn't edit the article directly. I don't think we can say that the article is in such good shape that we should assume that every provision has been carefully thought out and should be changed only after discussion.
 * If, however, you disagree with the edit, please feel free to explain why it should stay or how it should be usefully revised, and I won't be offended if you go ahead and revert the change. John M Baker (talk) 13:28, 26 February 2013 (UTC)
 * Can I put in a vote for retention? Speaking as a hedge-fund non-expert, I found no difficulty in understanding it, and I thought it was probably true, although there's no way I can know. Wouldn't it be better to track down the citation and read it first before deleting? (The title of the section and its location in the article are debatable.) Wildfowl (talk) 15:51, 26 February 2013 (UTC)
 * I just gave it a quick look, but I think it was saying that the greatly increased assets under hedgefund management and the competition to exploit market opportunities may be tending to reduce the amount of alpha that is captured in fund returns. This is an important issue, arguably true (although there may be other causes) and seems worthy of inclusion somewhere in the article.  I'm not sure whether it's in the right section or whether this particular citation is the best or even an acceptable source, however I don't see any reason to delete it rather than try to improve it.  SPECIFICO  talk  17:03, 26 February 2013 (UTC)
 * Before making the suggestion, I actually sought out the source, and found what seems to be a somewhat different version of it (see here), however it's difficult to find that particular assertion in the 9-page stretch identified in the original citation . The article is already overlong, and arguably anything that might be cut (or has been cut by others recently) has some degree of importance. Still, this seems like a rather narrow issue compared to the overall subject of hedge funds, hence my suggestion. Perhaps there should be a Market capacity article instead. WWB Too (Talk &middot; COI) 17:28, 26 February 2013 (UTC)

I see the deleted content more or less clearly reflected on page 3 of the link you provided. SPECIFICO talk  17:38, 26 February 2013 (UTC)
 * If rewritten in encyclopedic language and fit into context, I wouldn't necessarily object. On the other hand, it sounds like you have your own questions about the claim and the source. I have of course proposed improved language for this article recently, although sometimes that has found objections as well. In this case, I simply didn't think it was that important to understanding hedge funds and how they work, and so proposing elimination seemed the best course. Cheers, WWB Too (Talk &middot; COI) 21:12, 26 February 2013 (UTC)
 * I have reinstated the section, as it is still being debated. I reworded it a bit to acknowledge the uncertainty over whether it is a real effect. I also added WBB Too's citation, but then found that it is near identical to the earlier citation, differing only in the year of publication. We need to resolve this. I reckon we also need to decide where this text should finally go in the article. Wildfowl (talk) 20:20, 28 February 2013 (UTC)
 * Glad to see good community involvement here on this discussion. However, IMO it should be removed. Firstly, it appears to be a scholarly opinion, a white paper written by two grad students, and not a widely agreed upon or notable point that needs to be in this article at all. Secondly, I see nothing about it that is controversial or debatable. Its an opinion, so of course we could find another scholar who has a different POV and say there is a debate but that would be OR. Disclaimer: I am unable to access this citation: Géhin and Vaissié, 2006, The Right Place for Alternative Betas in Hedge Fund Performance: an Answer to the Capacity Effect Fantasy, The Journal of Alternative Investments, vol. 9, no. 1, pp. 9–18 Can someone provide a quote from that source to support the article text it cites? Thanks --<span style="font-family:Comic Sans MS,sans -serif"> — <b style= "color:#090;">Keithbob</b> • Talk  • 21:41, 1 March 2013 (UTC)
 * I don't always agree with Keithbob, but I tend to view this one the same way. While I appreciate Wildfowl's effort, and his new version is certainly coherent, the inclusion of this opinion is not crucial information for an encyclopedic treatment of hedge funds. Keithbob's point that it's not a widely agreed upon opinion is fair; I would add that it's not at all clear that there is real debate about this topic. I can live with Wildfowl's version, and never imagined my suggestion would inspire this much debate, but I think the article would be improved if again removed. Cheers, WWB Too (Talk &middot; COI) 22:01, 1 March 2013 (UTC)
 * I tend to agree that the source is not that good. I still feel also that this section is in the wrong place. However the sentiment behind it seems to be a real one. I have been reading Simon Lack's "The Hedge Fund Mirage" (sorry, WBB Too!), and it seems here to express the same idea: that performance of the hedge fund sector overall declines with its size. I am thinking now that the "Market capacity" section should go, and that a new paragraph on that sector-size effect ought to be added to "Performance measurement" (just below). I even think that "Performance measurement" should be brought out of "Debates and controversies" and made a section in its own right as "Performance". Thoughts, folks? Wildfowl (talk) 19:15, 2 March 2013 (UTC)
 * Apologies for the delay, Wildfowl. I'd support using a source that is easier to follow, and I do think the Performance measurement section is a better place for it. And about a Performance section, I don't have any thoughts immediately, but I'd like a chance to offer suggestions if you do write one. Cheers, WWB Too (Talk &middot; COI) 14:14, 5 March 2013 (UTC)
 * I have "been bold" and created a section called Performance as above. It contains all the bits relating to performance that I could find in the overall article, verbatim. The only section I have modified (slightly) is Market capacity, which I have renamed Sector-size effect, merging the citations and adding a citation to Lack (see above). Please feel free to hack what I have done around and/or discuss in here. Indeed if you think what I have done is altogether wrong, please say so and we can go back to "square one" and discuss from there. Wildfowl (talk) —Preceding undated comment added 22:09, 6 March 2013 (UTC)

History section: the first hedge fund
I noticed the article entry for Hedge Fund under its History section was changed to remove uncertainty surrounding the origin of hedge funds and makes claim that the Warren Buffett states that Graham-Newman Partnership was the first sourcing a Bloomberg article ("called the first hedge fund by Warren Buffett in 2006").

The Bloomberg article quotes a letter Warren Buffett wrote to the Museum of Financial History stating that "Incidentally, I make no claim that Ben's mid-1920s partnership was the first. It's just the first that I know of."

The most convincing history knowledgeable market participants have opined about the current incentive fee structure of hedge funds is that it derives from the participation (as it was called) structure of merchant banking, which most US investment banks were involved in long before they became investment banks. This merchant banking structure was itself an import from European financial houses, which further speculation says it was copied from merchant marine operators Renaissance Italy to ancient Greece.

This long history is however speculation so the best one could conclude today without further information is that the origin of hedge funds is uncertain and they did not start in 1949, as the article stated much earlier, and possibly before the 1920s per Warren Buffett's assertion.

If referring to the history as "uncertain" is too affirmative than it may be left to state that Buffett traces them back to the 1920s. (I also have Ben Graham's confirmation of his first hedge fund structure with an incentive fee structure for a wealthy client, but not a partnership, before the 1920s in his autobiography.)

I welcome your thoughts.

Pdunbarny (talk) 23:49, 26 February 2013 (UTC)


 * Hi Pdunbarny, thanks for your interest and research. But I'm not sure what you are suggesting we do. The article already says: according to Buffet, Graham Newman is the first hedge fund he is aware of (and its reliably sourced to Bloomberg). I'm not opposed to adding other info but it should be well sourced and stated succinctly. I'm trying to clean up the article as many sections, in their current state, do not serve the average reader because they are unnecessarily long and overly complicated. Any help you'd like to give to lend is welcome :-) -- — Keithbob • Talk • 19:18, 27 February 2013 (UTC)


 * Hi Keithbob, I notice the article's history section was revised. Removing the part deemed editorial regarding the uncertain origin of hedge funds is acceptable. This revised paragraph however now asserts that Warren Buffett stated that Graham-Newman was "one of the first hedge funds". That does not reflect the script of Buffett's letter from the article.
 * Again, the letter as excerpted in the article states, "Incidentally, I make no claim that Ben's mid-1920s partnership was the first. It's just the first that I know of." Buffett does not say Graham-Newman was one of the first hedge funds in history; he say rather that it is the first he knew of as he was not yet born when the Graham-Newman was established.
 * Editing the paragraph to read "one of the first hedge funds he is aware of" would turn Buffett into an authority on hedge fund history, which he specifically rejects in stating "Incidentally, I make no claim that Ben's mid-1920s partnership was the first."
 * The edit prior to its deletion was more accurate: "Warren Buffett, in a 2006 letter to the magazine publication of the Museum of American Finance asserted that the Graham-Newman partnership of the 1920s was the first hedge fund he was aware of, but suggested others may have preceded it."
 * If agreed, let's try to edit it so that Buffett is not placed as an authority but as a reference leaving, as he does, adequate room for the uncertain history of hedge funds origins. Pdunbarny (talk) 22:38, 1 March 2013 (UTC)


 * The above is a copy of a conversation that has been taking place on my talk page and I thought it should be moved here so others could join in if they would like to. --<span style="font-family:Comic Sans MS,sans -serif"> — <b style= "color:#090;">Keithbob</b> • Talk  • 22:44, 1 March 2013 (UTC)

Hi Pdunbarny, you have raised some good points. We don't want to make Buffet an authority. However, at this point I'm asking myself: a) if Buffet is not an authority and b) his non-expert opinion was recorded in a letter to a magazine and c) he freely admits he might be wrong. Then it becomes a trivial, non-expert opinion not shared by any scholars/experts (that we know of) and not covered in any meaningful way by the media (that we know of), and I have to ask myself, why are we mentioning it in the article at all? --<span style="font-family:Comic Sans MS,sans -serif"> — <b style= "color:#090;">Keithbob</b> •  Talk  • 22:50, 1 March 2013 (UTC)


 * Buffett was not so much as the source as was Bloomberg, which quoted Buffett. Perhaps the Buffett reference should go.


 * The below link to a blurb from the Museum of American Finance, linking to another Bloomberg article that in turn links to a CFO magazine article, all below, may help reach a conclusion or modification.


 * http://www.moaf.org/news/media_mentions/000116
 * http://www.bloomberg.com/news/2012-04-24/what-was-the-very-first-hedge-fund-ask-warren-buffett.html
 * http://www.cfo.com/article.cfm/8914091


 * You can make the call.
 * Pdunbarny (talk) 00:35, 2 March 2013 (UTC)

Fees and remuneration
I have returned the "Fees and remuneration" section to how it was a couple of days ago, as information seems to have been lost. Perhaps we could have a debate in here about the content of this section. Keithbob, you seem to think that the section was too long and needed shortening. Perhaps you could explain why? Wildfowl (talk) 21:09, 6 March 2013 (UTC)
 * As I have mentioned and demonstrated in several prior posts, this article is bloated and overly detailed and difficult to read. Its the result of many people adding info but no one taking responsibility for a section or the article as a whole and examining it and editing it so it is useful and reader friendly. I don't see anyone doing that. I have made some attempts at that and while I expect my version to be modified by others behind me I don't expect it to be reverted to a prior version thereby undoing all my work. Nor do I want to debate every sentence with editors who are resistant to change.  It's this kind of thinking and action that has kept this article in its current condition and it looks like its gonna stay that way as I am going to leave and look for other topics. Good luck to all of you. --<span style="font-family:Comic Sans MS,sans -serif"> — <b style= "color:#090;">Keithbob</b> •  Talk  • 18:22, 13 March 2013 (UTC)
 * Keithbob, sincere apologies, because I seem to have offended you. I just think that hedge funds are a big subject (upwards of $2 trillion invested, remember) and deserve adequate coverage. Surely the right way to scale the article down is to hive off some of the text to subordinate articles rather than cut the article down. Would it help to hive off "Fees and remuneration" as a separate article (under as suitable name)? Wildfowl (talk) 00:07, 15 March 2013 (UTC)
 * Your apology is gratefully accepted but I'm going to stand by original decision to migrate to greener pastures. Peace! --<span style="font-family:Comic Sans MS,sans -serif"> — <b style= "color:#090;">Keithbob</b> • Talk  • 00:55, 15 March 2013 (UTC)

Replace info in US regulatory section?
This question is partly for Keithbob, though anyone is welcome to respond: I noticed your edits to the Regulation section, simplifying and reducing the length. Great work, overall I think you were very judicious in your cuts, however there is I'd like to see about replacing. It was previously contained in this sentence:


 * Prior to the requirements of the Dodd-Frank Act, many hedge fund advisers voluntarily registered with the SEC.

The language has changed, so it probably doesn't make sense to add the sentence back directly. However, the section gives the impression that fund managers did not register until after Dodd-Frank, which isn't the case. I believe the current version is somewhat misleading in this regard, and it would be simple enough to add clarification to the first sentence of the United States subsection. Here are some reliable sources on the topic (quoting verbatim, so it would need to be reworded before adding):


 * Reuters: , but others relied on an exemption applying to those with fewer than 15 clients. Wednesday's rule closes that loophole.


 * Marketwatch: Currently, many hedge-fund and private-equity managers are not required to register and open up their books for periodic examinations because they advise fewer than 15 private funds. However,, in part, because many institutional investors wouldn’t invest their funds with them without the additional security of knowing the agency is checking their books periodically.

To Keithbob and anyone else watching, what do you think? Can we find consensus to add something about this back to the section? Cheers, WWB Too (Talk &middot; COI) 16:50, 13 March 2013 (UTC)


 * It does look as if a bit of information has been lost. Why not change "Previous exemptions no longer applied to most hedge fund advisers" to "Previously, some hedge fund advisers had voluntarily registered with the SEC; now most were required to register" – with the addition of one or both of the citations? The word "many" is suggested; does that mean more than half of advisers? The para is already rather long, so let's keep the change short. Wildfowl (talk) 22:14, 24 March 2013 (UTC)


 * Thanks for the reply, Wildfowl. Your suggestion would certainly work, although I have another idea which I think improves the presentation of information a bit more. Currently, that third paragraph of the United States subsection confusingly mentions registration requirements at the top and bottom of the paragraph. If we combine them, this would create the context for better explaining the previous situation. Here's what I'd suggest, with new and rewritten material highlighted in the first box:


 * As you'll see, in the revised version I note more specifically that many registered despite the exemption specifically to reassure institutional investors. I've used the MarketWatch story because it supports the additional detail, and while "many" is vague, it is supported by multiple sources and I can't find anything more specific. Also, in markup I've presented the full third paragraph of the section to make the update easier for someone else to implement. What do you think of this suggestion, Wildfowl? WWB Too (Talk &middot; COI) 16:41, 25 March 2013 (UTC)


 * Comments: (1) "... and required SEC registration ..." maybe should be "... and requires SEC registration ..." (present rather than past tense)? (2) "... clients and investors managing ..." looks as if it wants a comma in somewhere for disambiguation, as in "eats shoots and leaves". Wildfowl (talk) 18:59, 25 March 2013 (UTC)


 * Agreed on both points—especially the "eats shoots and leaves" situation there, yikes—I've made the change in both the markup and formatted versions. WWB Too (Talk &middot; COI) 19:53, 25 March 2013 (UTC)


 * Seems OK now. Have uploaded. Please check. Wildfowl (talk) 20:20, 26 March 2013 (UTC)


 * Looks great. Thanks! WWB Too (Talk &middot; COI) 22:49, 26 March 2013 (UTC)

I can't believe
I can't believe someone would take such a move. Do people ever learn. Anyway, it always form a good story once they #REDIRECT get burnt. Quote "in financial markets, where hedge funds have been borrowing at lower short-term rates and lending out at higher long-term rates on the assumption that Alan Greenspan and the Federal Reserve have slain the inflation dragon and would do nothing precipitous to jeopardize their "carry trade." —Preceding unsigned comment added by Wk muriithi  (talk • contribs)


 * Link to "get burnt. Quote" just above gives 404 not found, please fix.
 * 198.144.192.45 (talk) 16:38, 1 May 2013 (UTC) Twitter.Com/CalRobert (Robert Maas)

Side pockets
I see a few issues with the current Side pockets subsection: it's just 3 sentences, of which one is about their use during the 2008 crisis, and no citations are given. I'd like to suggest a brief expansion here, explaining how they work in layman's terms. My suggestion follows:

For others watching this page, what do you think? Agree that this section is more informative and balanced without being too much, or would anyone like to suggest changes? Cheers, WWB Too (Talk &middot; COI) 16:16, 10 April 2013 (UTC)


 * Hi, WBB Too. The sentence "When an investment is side-pocketed, its value doesn't impact the fund’s overall performance" may mislead because the performance as seen by the investor will be adversely impacted by the fact that, as I understand it, if the invester cashes in, he/she/it gets cash only for the part of the fund that lies outside the side pocket, and presumably some kind of voucher for the side pocket component. The latter will only be cashed when the manager decides to value the side pocket. Alternatively the investor may sell the voucher on a secondary market, probably at a steep discount to purchase price. Am I on the right track? In summary, I think the above sentence could do with being replaced by some brief text that explains how things look to the existing investor. Otherwise your text seems a distinct improvement. Wildfowl (talk) 22:55, 10 April 2013 (UTC)


 * Interesting question, Wildfowl. I'm looking back through sources and getting some input on this point. Will be back in touch once I have an answer. WWB Too (Talk &middot; COI) 15:31, 12 April 2013 (UTC)

Hi Wildfowl, I've gone back and revised the middle sentences of the section, which I'll paste in here below:

It's a bit longer than my previous suggestion, but this should clarify how the side pocket affects investors; what do you think? WWB Too (Talk &middot; COI) 13:25, 16 April 2013 (UTC)


 * WWB Too, I've got a brilliant idea: why don't we say "Side pockets are a way of burying toxic assets in a hole at the bottom of the garden in the hope that nobody will ever dig them up". No? OK, maybe not. So, I think your version is OK, but I want to think about it and let any other people who are following this comment. I'll let you know soon, and if I forget to, please feel free to prompt me. Wildfowl (talk) 20:46, 16 April 2013 (UTC)


 * Heh, I think you're right, that version wouldn't quite fly. No rush here, I'm more than happy to hold open the proposal a bit to see if others want to weigh in. Cheers, WWB Too (Talk &middot; COI) 01:11, 17 April 2013 (UTC)


 * Apparently not many of the 7,000,000,000 people on earth seem interested in commenting on side-pockets, so suppose we just go ahead with your last version plus an additional citation which I found for the last sentence? That would make the section look as follows. (The new citation can be seen in full by typing the title into Google, I have found.) Wildfowl (talk) 19:59, 18 April 2013 (UTC)


 * Hello there, Wildfowl! Sorry about the delay. New source looks perfectly good to me. I think it's definitely ready to go. Cheers, WWB Too (Talk &middot; COI) 21:02, 22 April 2013 (UTC)


 * Done. Wildfowl (talk) 17:40, 23 April 2013 (UTC)


 * Looks great, thank you! WWB Too (Talk &middot; COI) 14:24, 24 April 2013 (UTC)

Management fee text, incompatible units (money vs. payrate)
"A hedge fund typically pays its investment manager a management fee, which is a percentage of the assets of the fund" makes no sense, assuming the fee is periodic instead of one-time, because the assets are an absolute amount of money rather than a rate of money per unit time. This wording begs the question whether the fee is a one-time payment (as implied by the wording, but absurd IMO), or paid again each month or quarter or year or whatever other period of time. 198.144.192.45 (talk) 16:47, 1 May 2013 (UTC) Twitter.Com/CalRobert (Robert Maas)


 * You are right in saying the fee must be per month/quarter/year. The interval doesn't actually matter, as no figure is given for the percentage. Perhaps the word "annual" ought to be inserted before "management fee" for clarity. I will wait to see what other people say. Wildfowl (talk) 20:51, 1 May 2013 (UTC)


 * Hey there, Wildfowl. I'm not sure if you were looking for input from me, but I've asked MFA if they have any information to contribute to help clarify. I haven't heard anything, so I'd just say go ahead and make a change if you think it's correct, and if I get any useful info, I can share. Cheers, WWB Too (Talk &middot; COI) 21:21, 11 May 2013 (UTC)


 * I've changed "a management fee" to "an annual management fee" in the lead. Hope that's OK. Wildfowl (talk) 22:18, 11 May 2013 (UTC)

"not sold to the general public"
That's no longer going to be accurate, post-JOBS Act. — Preceding unsigned comment added by 213.41.72.26 (talk) 20:41, 16 July 2013 (UTC)


 * Hedge funds will continue to be limited to persons who are, at a minimum, accredited investors, which most members of the general public are not. John M Baker (talk) 18:16, 17 July 2013 (UTC)

Overvaluing assets
I see that Wildfowl reverted my deletion of the short and problematic section on "Overvaluing assets" under "Debates and controversies." Hedge funds do sometimes overvalue assets, usually assets that are not easily valued by public trading. There is no debate or controversy about this; It's just an investment risk that is well-known and well-understood. If we were going to discuss it, I would put it elsewhere in the article, and I probably wouldn't mention or rely on the one non-notable instance that is cited here, when there are plenty of other such. I don't greatly care about the issue or the edit, but just wanted to explain my rationale. John M Baker (talk) 22:04, 19 July 2013 (UTC)


 * Sorry John, I should have raised the matter in here first. Apologies. You can delete that section if you want; I agree that the example is non-notable and un-cited. But surely if hedge funds are regularly (as you say) "scheming to overvalue assets" (as the article says), that is something that needs mentioning under "Debates and controversies". Wildfowl (talk) 20:39, 20 July 2013 (UTC)


 * To clarify, while hedge funds do sometimes overvalue assets, so do all investment vehicles; it isn't anything that's specific to hedge funds or especially notable in the hedge fund context. John M Baker (talk) 19:43, 21 July 2013 (UTC)