• Matt DeLong

What do wealthy clients look for in a hedge fund before investing any money with them?

Most LPs (investors) look solely at past performance, which is faulty to begin with.

For example, if a hedge fund manager made a few trades and doubled his clients money because of an M&A deal with one of the stocks the HF owned, great, everyone is happy. The question is, can a new investor expect that kind of performance every year now? Does the HF manager think that is skill or luck? I’ve seen numerous managers how had good returns in their early days, but are out of business 10 years later.