It’s surprisingly easy to set up, you can keep costs down, and you won’t have to share the profits
If P.T. Barnum were alive today he would be a hedge-fund manager. Who needs suckers to go to the circus when you can collect 1% or 2% of their money per year and 20% or 30% of their winnings from the comfort of your office in Greenwich, Conn.? No profits? No problem. Close up shop, reopen under another name, and big institutional investors and wealthy individuals will still throw money at you.
If you want to invest in a hedge fund, there’s no need to bother with these gunslingers. Using mutual funds, you can put together a hedge fund yourself at a lower cost and without having to share your profits. With this personalized approach, you can also manage the fund with taxes in mind. Unlike hedge funds, which may require multiyear lockups or give only intermittent access to the money, you will have immediate liquidity. And mutual funds, while not totally scandal-free, are better regulated.
