Hedge funds have customers because the majority of them don't beat the market in the long run.
If a hedge fund is consistently highly profitable, they stop taking customers. For example, see RenTec's Medallion Fund, which is only open to its own employees.
Depends on their Sharpe and capacity. Really, only prop shops have no customers, and even those were often backed by someone in the early days.
RenTech's Medallion fund doesn't have customers, but it did for much of its history, and they have lower Sharpe programs with more market depth (and many customers).
That said, the track record for Bay Area hedge funds trying to do things "the Silicon Valley way" without experienced founders (experienced in trading) is pretty grim. The ones who succeeded had a track record of doing it before.
Well, originally the purpose was to 'hedge' your other investments. Typically, hedge funds invested in ways that would do well when the rest of the market struggled. Even if they don't best the market over the long run, they could be worthwhile investments to protect your wealth during ,Arlen downturns.
In short, having someone do HFT with your money can be a hedge because HFT strategies often do better when markets are volatile and other funds lose money.
Trading yes but a hedge fund or any fund really implies customers no?
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