WEST PALM BEACH, FL (HEDGECO.NET) – An increasing number of university professors are now moving over to hedge fund management, according to Bloomberg news. John Moody, a computer science professor,is part of an increasing number of university academicians who are opening hedge fund companies to test some new theories in hedge fund management.

The first of these efforts proved very profitable initially, as Connecticut based Long Term Capital Management built up massive investor assets, and at the time returned between 20-40% annually to the investors in the fund.

Soon however, LTCM was crushed by its own weight, as the one-time largest hedge fund manager in the world met a catastrophic end. LTCM management was mostly comprised of university professors, some from Massachusetts Institute of Technology and Harvard Business School. Myron Scholes and Robert Merton were former professors who were later recruited into LTCM, under the leadership of John Meriwether.

It should be noted that some of the most successful hedge fund managers come from academics. Names such as David Shaw, former associate professor of computer science at Columbia, and Sanford Grossman formerly of Wharton University have done well managing hedge funds.

There are also other highly successful hedge fund managers from the academic community, such as James Simons, who was at one time the head of the mathematics department at State University of New York. Simon�s hedge fund, Renaissance Technologies, was quite successful; his fund the Medallion fund manages about $5.3 billion in investor assets.

John Moody is another academician turned hedge fund manager. With an investment portfolio of about $6million, he holds a PhD in Physics from Princeton University according to published reports.

It is apparent that, like mutual fund managers switching to hedge fund management because of greater compensation, former university professors are doing so for similar reasons. Some market participants think the job of a professor is a very good background for pursuing a successful hedge fund management career. Many theoretical experiences gained in teaching are eventually tested in practical terms through hedge fund management.

Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net

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