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Usually because the strategies which have genuine alpha and consistently outperform are capacity constrained, and so cannot be scaled to handle both. Of course
by throwawaymath 7y ago
Usually because the strategies which have genuine alpha and consistently outperform are capacity constrained, and so cannot be scaled to handle both.
Of course, at RenTech in particular the employee-only fund is the good fund. But that's not always the case, so the parent commenter has a point. Deferred/locked up compensation can really suck.
- qwhelan 7y ago>Of course, at RenTech in particular the employee-only fund is the good fund Yeah, but only the long tenured/high performing employees get access to the good fund (there's a merely average fund that most employee deferred comp goes into, if I understand correctly). Former colleague of mine was a M&A trader at Lehman during the crash. 95% of his net worth was in his fund, which was up 50%+ for the year when the bankruptcy trustee seized everything. IIRC, he was starting to get his money back in ~2014-15.