Summary of The Hedge Fund Mirage

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The Hedge Fund Mirage book summary


7 Overall

7 Importance

8 Innovation

7 Style


Are hedge funds – those secretive oceans of capital invested in exotic financial instruments and derivatives – all they appear to be? Absolutely not, says Simon Lack, a former JPMorgan executive and hedge fund insider. He uses statistics and anecdotes – mostly horror stories and cautionary tales – to back up his controversial but simple thesis: Hedge funds are not good investments for most portfolios. Lack mentions a few success stories, touching on investment luminaries George Soros and John Paulson, but gives more attention to the industry’s colorful incompetents and villains. The book’s flaws are manageable – make sure to bring your calculator, because Lack includes math about internal rate of return calculations and discusses the best ways to measure hedge fund results. Some reviewers have questioned some of his calculations and comparative conclusions, so gather all the data you can, as always. Lack packs in lots of useful insight, especially in caveats for investors. getAbstract – which gives book advice but never, ever investment advice – recommends his report on the hedge fund industry to investors who work to stay informed.

In this summary, you will learn

  • Why hedge fund managers do better financially than their investors,
  • Why information about hedge funds is often hard to find or validate, and
  • What financial and legal issues to consider before investing in a hedge fund.

About the Author

Simon Lack, a veteran JPMorgan investment committee member and founder of the JPMorgan Incubator Funds, now runs SL Advisors LLC, a money management company.



Unimpressive Returns
Hedge funds trace their origins back to 1949, when Alfred Winslow Jones had the revolutionary idea of balancing long and short positions in an investment portfolio. His techniques, and others developed later, have made some hedge fund managers extraordinarily wealthy...

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  • Knowledge Pack
    Hedge Funds
    Hedge funds share high risk, high profits and high fees.

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