What exactly does a hedge fund manager do?

How does a billionaire hedge fund manager protect their personal net worth?

• If a billionaire's hedge fund goes down, investors take their capital and run, etc., how far will the billionaire's net worth likely fall? What is a billionaire hedge fund manager's net worth typically comprised? Will they keep most of their net worth locked up in their hedge fund or will they keep as much of it outside as possible and in what sorts of assets typically if so (if the former, then if their hedge fund went down surely they would go bankrupt)?

• Answer:

  In general hedge fund managers will keep their personal capital invested in their own fund. So if the fund generates negative returns that will reduce their capital. However having clients withdraw their money most often does not cause losses to the managers capital. Less client funds will reduce the fees they earn but won't reduce the value of the investments they hold.