Invest Like a Hedge Fund… Without the Big Bucks

Alpesh Patel|October 22, 2021

You probably haven’t heard of my friends, mentors and hedge fund colleagues Bill Lipschutz, Bernard Oppetit or Sushil Wadhwani.

Combined, they have several billion dollars of assets under their management.

I interviewed Lipschutz and Oppetit for my book The Mind of a Trader, which is how I met them.

These masters of the hedge fund world sit next to other billionaire managers you likely haven’t come across – such as Jim Simons, David Harding and David Shaw (who Jeff Bezos used to work for).

Their billionaire statuses prove that they are the best at what they do – you can’t build that kind of wealth by having one lucky year.

But, again, though they’re among the greats in a booming $3 trillion (that’s more than the GDP of the United Kingdom) industry… most ordinary investors have never heard of them.

We’re talking about a lot of money changing hands… and a lot of profits up for grabs. Yet most investors don’t have access to these types of funds… or their incredible profit-making potential.

Unfair Advantage

You can mostly thank regulations for that.

Hedge funds require a minimum investment of $1 million. And they are banned from marketing to retail clients. That means their client base includes investors with ultra-high net worths, family offices, sovereign wealth funds and institutions like pension funds.

Of course, even should you gain access by attaining an ultra-high net worth, chances are a fund still wouldn’t want to deal with you, as you’re just a single individual.

I’ve always felt this was unfair.

It was unfair that only these types of investors had access to the best financial data.

I saw it time after time when hosting my show on Bloomberg TV and after I became a hedge fund CEO.

The chairman of Goldman Sachs Asset Management would show me the company’s latest research over a cosy lunch… My fund’s “prime brokers” in New York would give me privileged access to the New York Stock Exchange and order execution through their teams on the floor.

It all seemed, like everything else in life, that money and privilege got you access.

I have a unique perspective on this because I come from a retail investor background. My Financial Times columns were written to share insights with the masses. My TV show on Bloomberg was free to access.

All the barriers in the hedge fund industry seemed opposed to my life’s work.

But just letting anybody in by changing regulations would not be the answer. After all, how many private investors want to pay what funds typically charge – 20% performance fees on their profits and 2% fees on their total investments.

And it’s not just getting the picks that makes hedge fund access unfair. It’s getting the critical insights that lead to those picks.

Worlds Apart

A mutual fund manager and a hedge fund manager – in my experience – are as far apart as someone playing Major League Baseball and someone playing Little League.

I’m exaggerating… but just a little.

The best and brightest in asset management want to go into my industry – not into long-only retail funds.

Think of it this way… A mutual fund charges fees equal to around 0.5% of the value of the assets it manages. Again, us hedge fund managers get 2%.

You get what you pay for.

So how do we solve this problem of access? How do we level the playing field and get average investors access to the best insights in the industry?

Stay tuned. I’m on the inside.

I’m about to get you access, without the fees, hurdles or requirement of extreme wealth.

I’ll have big news in less than a week.

Like I said, it’s only fair. Just call me Robin Hood… taking the best investing insights from the rich and sharing them with everyone else.