An American Hedge Fund - a 5 minute review
As you, my regular readers know, I have a soft spot for self-published authors, and when I find an autographed advance copy of “An American Hedge Fund” written by Timothy Sykes and self-published under the “Bull Ship Press” imprint, you know I’m going to take off with it and tear through it on a lazy Saturday morning.
Tim Sykes tells his own story of how he starts off with just over $12,000 and during his years at collage turns it into over $800,000. Read the book to find out the details of how he does it. After he leaves college he creates the “Cilantro Fund” and starts looking for investors to invest in his shiny new hedge fund.
The book doesn’t go into great detail about exactly what hedge funds are, so let’s talk about that for a minute. A hedge fund is generally a limited partnership which is formed to allow investors to become limited partners with the fund manager (or an LLC formed by the manager) as the general partner. The LP is used as an investment vehicle and the gains and losses of the fund are passed directly through to the investors after the fees. Generally the manager takes a 2% management fee, and 20% off the top of all profits.
This elaborate structure is set up to avoid having to deal with the SEC and bypass the restrictions that other money management structures, such as mutual funds, have to deal with. There is a catch. Only “Accredited Investors” can invest, you can’t advertise, and before an investor can invest you need to have a pre-existing relationship (of at least six months).
Many of the established hedge funds manage well over $100 million, have a two to five year track record and a 50+ person staff, so finding accredited investors is difficult. For the Cilantro Fund and their comparatively tiny $1.1 million, finding investors and fighting to stay afloat became a substantial challenge. The second half of the book describes the downward spiral in detail.
While many of the other reviews of “An American Hedge Fund” call the book “inspirational”, I am going to go with “spirited” as by the end of the book I was more exhausted than inspired. The book is a great read, and takes you through the ups and downs of a small player in an industry where the deck is stacked in favor of the Goliaths.
Since writing the book, Timothy Sykes has closed his hedge fund and started a website which is dedicated to inform the public and cut through the secrecy that has shrouded the hedge fund industry.
If you’re interested in Hedge Funds check out this article on what a hedge fund is.
“Look Mom, a PHP book without a chapter on design patterns”. Yup, you heard me right, the PHP Phrasebook goes back to the basics of PHP with a focus on functionality, simplicity and security, things which seem to unpresent in a lot of books these days.
