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SL Advisors, LLC
210 Elmer Street
Westfield,
N.J. 07090-2128
(908) 232-0830
sl@sl-advisors.com

Responses

  1. Dear Simon,

    First of all, I would like to say that I enjoy reading your work.

    I am writing to ask if you have had a chance to comment on the article by John Chapman in the April 8, 2012 issue of the FT. Chapman’s source attribution is inconveniently buried in an embedded chart, but I gather that he bases his calculations and conclusions (more favorable to the industry) on the Dow Jones Credit Suisse “asset weighted” composite index of hedge fund returns.

    I would be interested in your take on Chapman’s article.

    Best regards,

    Kent Kelley

    • Hi Kent. I’m glad to hear you enjoyed my book – I enjoyed writing it! I did read Jonathan Chapman’s piece. It’s not easily comparable – he defines equities as the benchmark for convenience although many HFs will tell you they’re not correlated with equities (indeed, for most investors that is the point of HFs). He’s also made some arbitrary assumptions about brokerage fees which may not be incorrect but whose basis is unclear. In sum, he didn’t appear to contradict my analysis, simply offered an alternative way of viewing results. I think the key issue is that HF returns have steadily dropped as AUM has risen. In my opinion it’s not a coincidence. HF supporters will argue it is. Time will support one side of the argument.

      Best regards, Simon


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