It was announced last week that it is Echo Street Capital Management getting out of the hedge fund gameOf course, this is not unusual. 304 hedge funds they closed their doors only in the first quarter of 2020. But Echo Street was struggling to raise money – it reportedly had a “waiting list of interested investors”, and its performance, although not particularly impressive this year, fell 10%, mostly “excellent”. Its founders do not retire to play with his money in the family office. The company will continue to pursue its long-term strategy of launching a new centralized vehicle that, frankly, sounds suspiciously hedged. There is only one main difference. Running it will not turn into Echo Street managers drilled shells that are collected for death with every minute of the trading day.
“Why is the environment of hedge funds becoming more complicated?” The letter of September 9 said: “Managers live in a field defined by their risk constraints. They can do whatever they want as long as they stay inside that box… If that box contains the need to “smooth the flow”, that box is getting tighter and smaller և. When it turns out that techniques are being used to smooth our journey, they are no longer smooth. ”
The workflow involved in finding investment ideas is “delightful,” the company continued. “The work process involved in smoothing the direction is more and more motivating.”