Hedge fund experts from 0 to 1

Being called a hedge fund master generally requires several conditions: 10 years of performance record, beautiful compound rate of return (20%+), earned 10 billion dollars and several classic battles.

There are about twenty or thirty investment masters who meet these conditions in the world, all of whom are legends in the investment field. The wealth stories of masters who earned billions of dollars from their net worth 1 dollar to tens of dollars or even 40 thousand dollars are naturally fascinating, but we are more interested in their step from zero to one, that is, starting a business and raising the first money. Before becoming a master, the master had no fame and no historical achievements. The team is an army of one person, and the first step of starting a business is not easy, relying on a popularity or chance. For the masters themselves, there are countless battles worth remembering in their lives, but it is estimated that the first battle-the first fundraising battle is the most difficult to forget, because it is a little excited and longing, and sometimes with some regrets.

The following are the entrepreneurial stories of five investment masters, from which we can not only understand the difficulties of private placement, but also find the secret of choosing excellent private placement.

Buffett (male name)

The most successful private placement in the world is naturally the richest man Buffett (Buffett holds 308,300 Class A shares of Berkshire, with a share price of $235,000 and a net asset of $72.5 billion). Buffett moved to Berkshire Hathaway after doing PE13 years. Buffett is the earliest among many investment masters and has the longest investment career. Today, at the age of 86, he is still struggling in the front line of investment.

Buffett was born in 1930. 1947 entered wharton school for undergraduate study and completed his studies in three years. 1950 went to the finance department of Columbia University to study as a graduate student, and studied under Ben Graham, the godfather of value investment. 195 1 After graduation, I wanted to work for Graham for free, but I was politely refused, so I worked as a stock salesman in my father's securities company for three years. During these three years, Buffett immersed himself in studying stocks, attended Carnegie lectures, taught investment principles at the University of Omaha (the textbook was "Smart Investors" written by his teacher), and fell in love and got married. At the age of 22, she married Susie at the age of 65,438+09 and gave birth to a daughter. From 65438 to 0954, Graham finally promised Buffett to work in his own company, and Buffett worked there for two years until Graham dissolved his own company. This is Buffett's experience before starting a business. Although Buffett was only 26 years old at this time, he was a professional investor with 7 years of stock age.

Buffett returned to his hometown of Omaha with his wife and two children in May 1956 and founded Buffett Partnership Fund. The scale of this first fund is $65,438+$005,000, and there are seven partners, namely Buffett's sister and brother-in-law, aunt, former roommate and his mother, Buffett's lawyer and Buffett himself. Among them, Buffett invested 100 USD (according to China's writing, can snowballs be called "from 100 USD to 70 billion USD"? ), in fact, Buffett's net worth at this time has reached $654.38 +0.4 million, and entrepreneurship is still emboldened. Buffett set up two more partnership funds that year, and by the end of the year, the total net assets of the partnership funds reached $303,726. What is the concept of this money? Buffett 1955 worked for Graham with an annual salary of 12000, and he 1957 spent $3 1500 on the five-bedroom house he bought in Farham Street, Omaha.

Since then, Buffett's road to private placement has been smooth, the rate of return has been red all the way, and customers have accumulated more and more. By the New Year's Day of 1962, the net assets of the partnership fund had reached 7.2 million US dollars (of which10 million belonged to Buffett personally), and the number of investors had also grown to 90. At this time, Buffett moved out of the bedroom to find an office and recruited the first full-time employee.

Buffett's entrepreneurship is quite successful. On the one hand, it benefits from the contacts brought by his father and mentor, but the most important thing is his personal appeal. Buffett made up his mind long ago. As early as 12 years old, he announced that he would become a millionaire before the age of 30, and he had strong interest and confidence in making money. From 65438 to 0968, edward thorp, the originator of quantitative investment, played bridge with Buffett several times, and came to the conclusion that this man would become the richest man in the United States, because his investment philosophy, analytical ability and flexibility were first-class.

Buffett ended Buffett's partnership fund in the autumn of 1969, mainly because there were too few opportunities for value investment at this time (then the American stock market went into violent shock in the 1970s) and the fund scale was too large (at the beginning of 1969, the fund scale had increased to1040,000 US dollars), so he didn't want to be busy investing100. Buffett did not retire, but moved to Berkshire. Buffett spent the rest of his life turning Berkshire into a money-making machine and becoming the richest man in the world.

Buffett's compound rate of return of 1957- 1969 is 23.2%, of which 1969 is the worst, basically zero, followed by 1957, with a yield of 9.3%, and the middle 1 1. Berkshire's performance has been recorded since 1965. During the period of 5 1965-20 15, Berkshire's average compound annual return on net assets per share was 19.2% (since 20 14, Berkshire's share price return has also been included. " By 20 15, this figure is 20.8%, which is close to the increase of net value, but there are many years with negative returns, especially 1974, which dropped by 48.7%. In 2008, it increased by 7989 times! If you add the achievements of Buffett Partnership Fund in 1957- 1964, the total investment of 1 USD will increase to $40,000 in 59 years!

Will Buffett really retire after the 20 17 shareholders' meeting? By then, he will have a 60-year performance record, which is unprecedented in the history of investment and is estimated to be unparalleled.

George Soros

Soros was also born in 1930, the same age as Buffett. What a coincidence. As an immigrant from Hungary to the United States, Soros's road to entrepreneurship is much more difficult, which can be described as a typical counterattack.

Soros escaped Nazi occupation in Hungary. After the war, he left Hungary for London on 1949 to study at the London School of Economics (LSE). Soros got his degree at 1953, and the thesis tutor was the famous philosopher karl popper. After graduation, I did several short-term jobs in Britain, such as handbag sales, and finally worked in SF Bank (Singer &; Frilander) got a job as a trader, doing gold and stock arbitrage.

1956, Soros came to new york with $5,000. With the help of colleagues in London, Soros found a job in F.M.Mayer Company, first as an arbitrage trader, then as an analyst, and then transferred from 65438 to 0959 to Wertheim Company to continue to engage in European securities business. 1963 job-hopping to Arnold le qi company (Arnold &; S.Bleichroeder), 1967 was promoted to head of research department.

In his life, Soros got married on 196 1 and became an American citizen in the same year. This year, Soros used the weekend to redraft The Burden of Consciousness, which he wrote ten years ago (his own evaluation is: except the title, the whole text is not good), hoping to publish it and send it to his tutor karl popper for review. It took three years to revise it from 1963 to 1966, but it was not published at last. Soros still wants to be a philosopher at this time, but his life is under great pressure. Five or six years after his father came to America, he got cancer. Soros had to find a surgeon who could provide free medical care. Soros finally put down the heart of being a philosopher for a while and returned to make a living.

Soros established the company's first fund-First Eagle Fund in 65438-0967, which is a long-only stock fund. Soros set up a second fund on 1969, called Double Eagle Fund (renamed Quantum Fund a few years later), which belongs to hedge fund. Its investment scope includes stocks, bonds, foreign exchange and bulk commodities, which can be sold short and leveraged. The Double Eagle Fund was established with Soros's own contribution of $250,000. Soon, some European tycoons he knew injected $4.5 million, which was Soros's starting capital.

1970, jim rogers joined the Soros team, responsible for research, Soros focused on trading, and the two became golden partners. 1973, Soros established Soros Fund Management Company, with only three rooms in the office overlooking new york Central Park.

Soros increased from $4.75 million at the beginning of 1969 to $449 million at the end of 1984 through the efforts of 16. The total inflow of external funds in 16 was-1 60,000, mainly because Soros lost 22.9% in 198 1 year, when customers withdrew1100 million dollars, and the total inflow in other years was 84 million. Soros 16 has a compound annual rate of return of 30.89% (compared with Buffett's 23.4 1% in the same period). Despite such a good performance, the scale of the fund has not increased rapidly because of this, and it has been growing by internal income, which is really incomparable with Buffett.

Soros Fund performed even better in 1985- 1999, pushing the compound annual rate of return of Soros Fund to 32.49% (1969-1999 * * 31year, compared with Buffett's 24.93% in the same period. Soros Fund also ushered in a rapid development in scale, reaching 1.986 million USD and 1.9965438 USD at the end of 1986. Soros became famous after 1992 attacked the pound. By the end of 1993, the scale of Soros Fund had grown to11400 million dollars, reaching the peak of 2 1999 dollars.

Soros Fund lost 15.5% when the Internet bubble burst in 2000, which is the second loss after 198 1. However, in 2006, 13.8% and 5438+0 were recovered, and the income in the following years was acceptable, but after all, it was in a semi-retirement state, which was not as good as in the early years. In the subprime mortgage crisis in 2007-2009, Soros turned the tide again, earning 32%, 8% and 28% respectively, which once again proved his most outstanding global macro trading ability.

Tiger fund Robertson

Julian Robertson of Tiger Fund belongs to the godfather of hedge fund industry, and is also called the Big Three with Soros and steinhardt. However, Robertson was a late bloomer. He was 48 years old when he founded the Tiger Fund.

Robertson was born in 1932, only Bisrose was two years younger. When he was young, he liked sports and played baseball and football very well. 1955 after studying at north Carolina state university, he joined the navy and was promoted to lieutenant after serving for two years. 1957 went to new york and joined Kidder Peabody company (Kidder Peabody &; Co.) work, this stay is 22 years. Robertson worked as a salesman in Peabody Company in Kidder, selling stocks and bonds to individual and institutional investors, and held many positions, eventually becoming the head of the fund management department. Robertson prefers fund management to sales. After work, he manages personal stock accounts for some friends and colleagues, and the effect is good. Robertson adopts the value investment strategy, and selects stocks by mining fundamental information and evaluating the value, with a long holding period.

Robertson has a good friend, Robert Burch, who became the son-in-law of Alfred Jones in 1970. Jones is recognized as the inventor of hedge funds. Reporter Jones did some research on the stock market when writing an article for Fortune magazine, and found that the long-short pairing of stocks can eliminate systemic risks, thus making profits in both bull markets and bear markets. With this secret, Jones set up a hedge fund and made a fortune. Robertson often communicated with Qi Bo and Jones, and realized the charm of hedging. He combined long-short hedging with value investment and formed his own model.

1978, Robertson took his family to New Zealand for a long vacation and wanted to write a novel about how an American southerner successfully established himself on Wall Street. Unfortunately, he got tired of writing this book a few weeks later. Finally, New Zealand's beauty, golf and tennis can't keep his heart, because he is going to start a business!

1980 In May, Robertson and his friend Thorpe McKenzie raised $8 million to set up the Tiger Fund. The name tiger was put forward by Robertson's seven-year-old son, who tried hard to find a nice name before. Robertson is a sociable person (there are thousands of business cards in his business card box), with many friends and extensive business relationships. It is estimated that he can raise $654.38 billion. As a result, he was disappointed and only completed 8% of the fundraising goal! This includes Jones' fund, which changed from self-management to FOF management after his son-in-law Qi Bo took over.

Fortunately, the timing of 1980 is very good, which coincides with the beginning of the 20-year bull market in US stocks. Tiger Fund achieved a post-fee return of 54.9% in that year, and an average high return of 32.7% in the following six years.

Robertson perfectly combined value investment with stock long-short strategy. By recruiting a large number of smart young people with sports expertise to dig deep into the fundamentals, he did a good job in internal talent training management and external marketing, and the scale expanded rapidly. By 199 1, Tiger Fund became the third hedge fund with a management scale of over 1 billion USD. By the end of 1993, it had reached $7 billion, more than Bastin Hart and only a little less than Soros (you know, Tiger Fund started later than Soros 1 1 year). The scale of the fund reached the peak of $2 10 billion in August, 1998, and the number of company members also exceeded 2 10.

But after the scale expanded to tens of billions of dollars, due to the liquidity of the stock market, Robertson had to expand his investment field from stocks to bonds, foreign exchange and commodities, which is the so-called global macro market. Robertson's value investment style is not suitable for global macro investment. Although I made a lot of money at the beginning, I made a lot of money in bonds, foreign exchange, palladium and copper, but in the end, I lost more than 4 billion because I shorted the yen against the US dollar at 1998, and the fund suffered heavy losses from prosperity to decline.

It's been raining. At the end of 1990s, the Internet stocks of Nasdaq soared, and the price changed from overvalued to more overvalued. Tiger Fund's strategy is to do more traditional value stocks and short Internet stocks. As a result, I was frustrated at both ends. The fund fell 19% on 1999, down 43% from the peak of 1998, while the Standard & Poor's 500 rose 35% in the same period. Tiger Fund fell again 13% in the first quarter of 2000, and the redemption tide surged. Robertson couldn't hold on, and finally closed the Tiger Fund in March 2000. At the same time, Nasdaq peaked at 65,438+00 in March 2000, and then collapsed.

Despite the continuous decline in the last three years, the compound rate of return of Tiger Fund 2 1 year is as high as 23.37%, and the original investment 1 USD has increased to 82.32 USD.

The ending of Tiger Fund is regrettable, and a legend is over. However, Robertson's story is not over. Later, the investment supported many tigers. There are about 40 young fund managers starting businesses from Tiger Fund. The general management fund accounts for about 65,438+00% of the whole hedge fund industry and 20% of the stock long and short strategic funds, and it is an influential group in the hedge fund industry. Robertson can rank among the hedge fund masters because he has trained a large number of little tigers, which other masters can't do. It is difficult for Buffett and Soros to even find a satisfactory heir.

Green light capital Einhorn

Einhorn is a rising star in hedge fund industry, a famous value investor and short seller, and is called "the next Buffett" by some people.

Einhorn was born in 1968. He liked math and debate when he was in middle school. He studied government management at Cornell University as an undergraduate. His graduation thesis elaborated the periodic supervision of American aviation industry. The conclusion is not to invest in the aviation industry. In Buffett's words, "investors should shoot down the Wright brothers' plane from the air. "After graduation in 199 1, I worked as an investment bank analyst in DLJ Company for two years, working more than 100 hours per week. After two painful years, instead of going to business school as usual, einhorn went to Siegel Coleridge Fund as a buyer analyst. Three years later, he learned to invest and invest in research.

1At the beginning of 996, einhorn and his colleague Jeff resigned and started a business together. Because his wife gave the green light, they named the company Green Light Capital Fund Company. Einhorn and Jeff thought they could raise $6.5438+million, but in the end they only raised $900,000 in May, of which $500,000 came from einhorn's parents, and einhorn and his partners each invested $6.5438+million.

The strategy of Greenlight Capital is the same as that of Tiger Fund. The difference is that its long and short positions are not matched one by one, but long positions worth doing and short positions worth shorting are found to match the overall positions. Generally, the holding period is above 1 year, and the positions are concentrated. Generally, 30%-60% of the funds are invested in the five largest long positions. The fund pursues the goal of absolute return, that is, no matter what the market environment is, it must strive to achieve positive return.

An interesting thing happened during the fundraising process. A rich friend introduced by a partner gave einhorn a poker intelligence test. The topic is: Take out cards of the same suit from a deck of playing cards and arrange the cards in good order, so that people can put the top card face up, put the next card at the bottom, then put one card face up, put the next card at the bottom, and so on until all the cards are arranged in numerical order. Einhorn got the wrong answer and missed the investment. I wish someone would give me such a question! )

After May, Greenlight Capital achieved a high return of 37. 1% at 1996, and there was no negative return for one month. The assets under management soon reached130,000 USD. In order to celebrate the victory of the first year, einhorn invited 25 investors including his parents to have an Italian meal on a winter night and reported the results by the way!

From 65438 to 0997, Greenlight Capital made a profit of 57.9%, and its assets under management reached $75 million at the end of the year. 1998, the performance of Greenlight Capital was average, only 10%, but its scale increased to 654.38+65 million USD. From 65438 to 0999, the fund achieved a rate of return of 39.7%, and the assets under management increased to $250 million. In 2000, in the fifth year, the fund yield was 13.6%, while the Nasdaq index plummeted by 39%, and the fund scale increased to 440 million dollars. 200 1, Nasdaq plunged by 20%, Greenlight's capital gains were 3 1.6%, and its assets under management reached $825 million.

In the 1990s, the American stock market soared, and a large amount of funds poured into the hedge fund industry. Einhorn is bold and much luckier than Tiger Fund, which has the same investment style, and has enjoyed a good time for several years.

Ehorn's famous job was shorting Lehman Brothers in 2008, from which he made a profit of more than $654.38 billion. Now, he is still active in the front line and has great influence in the market.

Michael berry

Michael Burleigh is not a crocodile in terms of scale and working hours, but his story is inspiring, and the battle for fame is quite thrilling. His way of managing hedge funds has been carried forward in China, so let's take a look at his story.

Burleigh was born in 197 1. At the age of 2, his left eyeball was removed because of retinal glioma and a glass artificial eyeball was installed. When Barry was in elementary school, his IQ test was surprisingly high, but he had few friends. In the fifth grade, when his parents divorced, Burley and his younger brother lived with his father and used weekends and holidays to work as coolies in the IBM laboratory where his father worked. The money earned was used to invest in the same fund. In high school, when his parents remarried, Burley became more and more confident and got better grades. However, when he graduated, he was rejected by his favorite Harvard University because of the negligence of his English teacher, and went to the preparatory class of medical major at UCLA. Burleigh had a bad relationship with people around him and was later diagnosed with Asperger's syndrome, an autism that caused social difficulties. Naturally, Burleigh turned his interest to stocks again. 199 1 year, Burleigh was admitted to Vanderbilt University School of Medicine, and his father died in the third year.

From 65438 to 0996, Burleigh started a personal website-valuestocks.net, which talked about stocks, and published several long articles every week. Probably because there were too few websites on the Internet at that time, a few months later, the director of MSN visited Burley's website and invited him to become a columnist of MSN at a cost of 1 USD per word. Burley readily agreed, took a pen named "The Value Doc" and started talking about stocks on MSN, which quickly attracted many readers.

1997 graduated from Boli Medical College, owed a student loan of $65,438+0.5 million, and found a job as a pathology research resident in Stanford University Hospital. That autumn, he posted personals (the first generation of netizens! ) On the dating site Match.com. Why don't you join the internet? ), fell in love with China woman ??c· Ann (lêmanuel Anh) and got engaged three weeks later. Being a doctor is hard. In order to do a good job in the stock market, Burleigh often stays up all night, using the evening time to publish articles and update the website.

In June 2000, Berry was 29 years old. After his work in Stanford University Hospital, he doesn't want to be a doctor anymore. He thinks Buffett should be studied as an investment. With the support of his wife and family, he opened an account in Bank of America and started his career as a hedge fund. Burleigh is ambitious, setting the minimum net asset requirement for investors at $6.5438+0.5 million, basically excluding everyone he knows.

Fortunately, a few weeks later, Greenblatt, the author and hedge fund manager of the best-selling book You Can a Stock Market Genius, came to me and bought a 22.5% stake in Boli Company for 1 10,000. Greenblatt is also a fan of Boli and has been waiting for him to leave the medical profession. Bob used the money to repay the student loan, named the company Scion Capital, and rented a small office a few blocks away from Apple's computer headquarters. The former owner of this office is Steve Wozniak, the co-founder of Apple.

Burleigh's road to private placement is quite smooth. 200 1, the S&P 500 index fell 1 1.88%, and the net capital of future generations rose by 55%. In 2002, S&P fell again by 22. 1%, and Boli made a profit 16%. In 2003, the stock market rebounded and Burleigh's portfolio rose by 50%. In 2003, Burley managed assets of $250 million, which reached $600 million by the end of 2004, so he no longer accepted new investments.

In 2003, Berry earned more than $5 million a year, so he spent $3.8 million to buy a 6-bedroom house in Saratoga, California for a family of four.

While buying a house, Burley felt that the house price was a bit frothy, so he made an in-depth study on the housing market and MBS (mortgage-backed securities), and the conclusion was amazing. He thinks that the real estate crisis will break out sooner or later, and the decision to short MBS is an excellent opportunity and his "Soros trade". His discovery was one year earlier than Paulson, the bear, and several years earlier than Soros himself. So from 2003 to 2006, he managed his "Soros Trading" for four consecutive years, shorting some financial stocks and constantly buying CDS contracts. The CDS position has been floating for four years.

Despite the enormous pressure, Burleigh still has confidence in his judgment, but investors have gradually lost confidence. Even though Burleigh earned 242% for investors in the past five years, investors are still very opposed to Burleigh's "Soros trade". Burley's efforts to launch a new fund failed, and the relationship with customers remained stiff. In June 2006, even Greenblatt, who first admired himself, couldn't stand it. He flew to San Jose, and they quarreled and broke up. In this year, customers withdrew $654.38+0.5 billion, and Burley had to bear the loss and sell half of CDS positions.

It was not until August 2007 that Polly began to win. At the end of this year, the company's profit was 1.50%, and it earned 700 million dollars. Boli personally earned 70 million dollars. Burleigh is ready to make progress in 2008, but customers keep withdrawing funds. In the second half of 2008, only $450 million was managed, much less than $650 million in early 2005. Burleigh finally got fed up and closed his company in early 2009.

Ten years after Michael Bury's private equity (PE) venture, there are countless imitators in China, and there are a large number of folk traders in China. They gain fans by writing articles on forums and blogs, or show their faces by showing their trading results and participating in stock trading competitions or futures competitions. Generally speaking, the entrepreneurial road of such grassroots funds is very difficult. Compared with fund managers from investment institutions such as public offering, the scale can't compete at all, and the final performance is mixed.

From 0 to 1

The above masters are all successful cases, from zero to one, and then to legend. However, there are also many cases of failure. Many hedge funds that started at the level of 1 100 million ended in failure. 1 is the peak, such as Long-term Capital Management Company (LTCM).

Of course, this is not an inevitable law. It is difficult to predict the future of fund managers through the initial offering of private equity funds (PE). It is difficult to predict, especially in the future, both for financial investment and the choice of fund managers.