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The Hedge Fund Book: A Training Manual for Professionals and Capital-Raising Executives by RICHARD C. WILSON

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7

Giant Hedge Funds

On the mountains of truth you can never climb in vain: Either you will reach a point higher up today, or you will be training your powers so that you will be able to climb higher tomorrow.

—Friedrich Nietzsche

While most hedge funds are small in size it is typically the largest of hedge funds which are most secretive. These hedge funds have assets, secrets, and processes to protect from hungry competitors. This chapter provides a unique insight to some of the marketing, operational, and investing best practices of hedge funds with $1 billion or more in assets under management.

Why important: If you are trying to grow a hedge fund it can help to see what the hedge funds who are receiving most of the new incoming capital are doing. In this chapter we provide some clues and a peek behind the curtain to what the largest of hedge funds are doing different from smaller fund managers in the industry.

BEST PRACTICES FROM $1 BILLION-PLUS HEDGE FUNDS

Following is a list of ten best practices that I have seen $1 billion-plus hedge funds employing that are more often than not missing within small teams of hedge fund professionals. Large well run hedge funds often have:

1. Better research processes in place, and these are constantly being improved in many ways every quarter. They focus on Kazien—constant improvement.

2. Documentation. Their compliance processes, operational procedures, compliance checks, internal controls, hiring processes, and risk management techniques ...

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