How do fund managers make money?

Why are there fewer famous hedge fund managers in Asia than in the US?

  • There are so many famous American hedge fund managers like John Paulson and Ray Dalio. Why haven't I heard of someone from Asia? Is it because it is harder to make money as a hedge fund manager there?

  • Answer:

    I am the guy who posted this question. I got an answer for myself. Why bother with the risky stock market to make ~20%-30% return when you can invest in the safer real estate market with 50%-70% return?

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They have a different goal. Western counterparts obtain clients using the fame they have, which comes about through being outspoken and making noise with the predictions and boasting about the returns. Asian/Eastern fund managers have a different set of cultural mandates, and value subdued/low-key profile. Their clients come to them through the recommendation from the current clients (word of mouth) and not by exposure in the media. (As far as the returns which you had listed in a separate response, they are historical averages, and will prove to be unsustainable in the long term - and this is when those low-key hedge fund managers you've never heard about will reap the benefits).

Anonymous

Asia in generally isnt really open and comfortable to this asset class and the dynamics they bring in. Also, Asians are more risk adverse and like to invest in tangible value and stable things, like real estate, businesses, ports, utilities. Lastly, lack of expertise and opaque reporting and legal framework.  Information is hard to obtain and even if obtained, accuracy is always in doubt.

Mervyn Teo

In Asia, rich private individuals don't trust fund managers, and so they prefer to trade through family offices and prop trading firms.  The person in charge of the family office and trading firm is the person that everyone talks about, and they don't want people stealing the lime-light. You do have large funds which are funded by institutional investors.  However most of these institutional investors are directly or indirectly associated with the government, so they like to keep things very, very quiet.

Joseph Wang

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