Hacker News Reader

Comment by balls187 | Hacker News Reader

Am I wrong if feeling no sympathy for a Hedge fund getting bilked?

Like it's nice that for once it's not the "little guy" getting screwed over.

Hedge funds frequently have charitable foundations and pension funds as limited partners. Unless the hedge fund is just a family office, there's a high probability that the "little guy" will be impacted, somewhere.

I can't tell you if your schadenfreude over hedge funds losing money is right or wrong, because that's based on normative values. But I'd encourage you to adjust your understanding of the financial dynamics involved.

But if the Theranos deal panned out, who would have benefited from the investment by the hedgefund?

Would it be the "little guy?" Or would it be the fund managers, and all the "insiders."

It goes hand and hand with the notion that the system is rigged.

Do you know how a hedge fund works? Investors (the pensions and charities and so forth) bear all losses and gains, minus the fund's fee.

> But if the Theranos deal panned out, who would have benefited from the investment by the hedgefund?

A hedge fund is an investment fund that pools money from investors and then invests it according to the hedge fund's strategy. So, the primary people who will benefit or lose are the people who invested their money with the hedge fund. Hedge funds also tend to take a percentage of profits as part of their compensation.

I don't see what connection there is to the notion that the system is rigged. No one is obligated to invest in hedge funds and the people who do are aware of the hedge fund's compensation structure. Anyone who invests money is aware that investments have risk and can fail. The purpose of a hedge fund is to invest money to generate (better-than-market) returns, and so the hedge fund will be compensated if that happens. The fact that they're compensated from profits acts as an incentive for them to actually generate profits.

^Spotted a Bernie fan. :)

>Am I wrong if feeling no sympathy for a Hedge fund getting bilked?

I would think so. You feel sympathy for small investors who get bilked but not large ones, purely because the large ones have more money?

Well, notwithstanding all the ordinary people who got blood tests done by Theranos that were later invalidated.

It would suck if you made financial decisions based on falsified documents.

How hard do you have to lie in order to pass the due diligence required for a $100m investment?

Ask Elizabeth Holmes.

This is easy to do if you doctor documents, indeed the only reason straight up forgery isn't done more often are the legal ramifications discussed here.

Reply on news.ycombinator.com