Hedgies are Human

Joe Nocera tells the story of a hedge fund manager who has decided to return his investors’ funds and pursue a different career path, one that isn’t focused on compensation alone.

From the New York Times:
Two weeks from now, a seven-year-old hedge fund called Alson Capital Partners will return around $800 million to its investors, and shut its doors for good…the fund was founded and managed by Neil Barsky.

Barsky ran a long/short fund and considered himself an old-fashioned stockpicker.  Unfortunately, in our current era, Barsky found himself out of place as more and more emphasis is being put on macrotrends and weekly performance reporting (instead of quarterly).

Barsky is a class act.  2008 was a tough year for his fund, as it was for many other funds.  Rather than trudging along in a new, unfamiliar climate, he made the decision to wind down on his own terms.  He’s made some money, but he no longer believes he has the mindset to compete each day on behalf of his investors.

His exit is not only based on a desire to walk away from the relentless stress of the job; he’s also come around to a realization that there are other things that people of intellect and skill could be doing with their lives.

Although Mr. Barsky has clearly gotten rich, he was surprisingly clear-eyed about the societal imbalances of hedge fund mania. The industry, he told me, “was part of this huge trend towards the celebration of wealth. Hedge fund managers overearned. It just became too easy. There has been a massive misallocation of human resources. I have so many smart guys here who were making seven figures. And I think it is a fair question to ask: what would they have been doing in 1948 — going into the foreign service? If Obama does anything, the best thing he could do is change a generation’s values.”

I hope Barsky is able to find what he’s looking for, a place to put his talents and insight to work for a broader societal benefit.

Congratulations for going out for the right reasons, Neil.

Full Story: Hedge Fund Manager’s Farewell (NYT)