8 ms·

$60m isn't exactly the real cost to the government, though? Assuming this asset manager is a Norwegian resident, he'll pay a ton of tax (income or corporate tax

$60m isn't exactly the real cost to the government, though? Assuming this asset manager is a Norwegian resident, he'll pay a ton of tax (income or corporate tax, VAT, stamp duty on property purchases, capital gains, etc etc) on that money, and eventually given enough time, most will just flow back to the government. The house always wins.. Also, it depends on how much he brings in. For example, there are US based asset managers with private funds that generate 20-30-40% per annum, for over 20 years. If the performance is there, they should get compensated well for that. Otherwise, why put up with the stress of managing billions of dollars?

kristofferR 10y ago
The asset manager in question, Mattias Westman, wasn't Norwegian. > there are US based asset managers with private funds that generate 20-30-40% per annum, for over 20 years. That seems extremely dubious. Do you have any sources?
- vidarh 10y ago
  It's not controversial that there are funds with high returns over long periods. The problem is that there are also funds with high returns that suddenly nosedive, and new funds from people with high returns in the past that doesn't do well at all. In other words: it's easy to pick the lottery numbers with hindsight.
necessity 10y ago
... and the inhabitants always lose
finstell 10y ago
> 20-30-40% per annum, for over 20 years It is impossible, at least continuously. Nobody has ever managed to do that. You'd be lucky if you could beat the market by a few points on average over a 20 years time period. Compensation well for good performance does not make sense when you aren't penalized for losses.
- kristofferR 10y ago
  Yeah, the oil fund averages just 0.25% above index, and that's without the extra cost of being actively managed factored in (although its huge size probably makes it impossible for it to be passively managed).
  - 010a 10y ago
    Are you aware how much 0.25% of $800 billion dollars is? Now, go ahead and complain about a $60M compensation.
    - robryan 10y ago
      So at this stage factoring in the active management cost they are outperforming the market. Of course we don't know in the long run whether that will continue to be the case.
  - ascorbic 10y ago
    It's hard to beat the market when you're bigger than many markets.
- avn2109 10y ago
  >> "...impossible..." https://en.wikipedia.org/wiki/Renaissance_Technologies https://en.wikipedia.org/wiki/Renaissance_Technologies "...famed for one of the best records in investing history, returning more than 35 percent annualized over a 20-year span..."
  - melling 10y ago
    And they used algorithms: https://www.youtube.com/watch?v=QNznD9hMEh0 https://www.youtube.com/watch?v=QNznD9hMEh0
  - tormeh 10y ago
    People have done it before. It has always turned out to be luck. Fantastic track record until they cease being lucky. So, cynicism and economic orthodoxy aside, that sounds like a really cool company. Has anyone tried just tossing a big dumb neural network on stock data and investigated whether it can make money? It sounds very obvious, but a quick googling returns little. But I guess the investment industry is pretty secretive by nature.
shiven 10y ago
For example, there are US based asset managers with private funds that generate 20-30-40% per annum, for over 20 years. Pure Horseshit. Plain and simple. Or, in other words: "Pics. Or it didn't happen."
- Gustomaximus 10y ago
  I dont have pics, but insight. Typically these are funds exclusively for high net worth individuals. They are not advertised. They select who they let in and have limited pools of investment given they invest in areas/business that dont scale to trillion dollar levels type thing. They get to invest in business etc before the open market via their relationships which is I assume why they can get these returns. My source is a friend who is a partner in one of these funds. They average well over 20% return before fees. Typically they want people with $50m investable before your worth the conversation. And the sad thing for people like us is they are typically asked to preserve wealth (aka make sure I'm never poor) and and growth is secondary consideration.
  - shiven 10y ago
    So, by its very nature, investing based on access to privileged opportunities. Who's to say it is not based on leveraging privileged information too? In other words, a type of insider trading. Or market pre-loading. Guess public sentiment hasn't caught up to such practices, yet, so they can get away with it. What is the failure rate for such private funds? Obviously, we may never hear of their failures, just as we don't hear of their successes.
    - Gustomaximus 10y ago
      > investing based on access to privileged opportunities I feel you really taking a bias stance here without understanding the mechanics. Yes privilege exists, the same as you friend might tell you a job is opening before its open knowledge. But deals will be shopped about. The big difference is many deals cant reasonably go to the public market. Costs for listing regulations would be significant and unnecessary. Consider, you need to be called as a 'sophisticated' investor even to trade options. This is to protect the public from unscrupulous pyramid schemes and business that carries high knowledge levels to understand what your buying into. It's as much about protecting the public keeping some deals away from open markets as being 'privileged'. > Obviously, we may never hear of their failures If your around this industry you hear plenty of both sides. Bigger ones go to public news like Madoff.

kristofferR 10y ago

The asset manager in question, Mattias Westman, wasn't Norwegian. > there are US based asset managers with private funds that generate 20-30-40% per annum, for over 20 years. That seems extremely dubious. Do you have any sources?

vidarh 10y ago
It's not controversial that there are funds with high returns over long periods. The problem is that there are also funds with high returns that suddenly nosedive, and new funds from people with high returns in the past that doesn't do well at all. In other words: it's easy to pick the lottery numbers with hindsight.

necessity 10y ago

... and the inhabitants always lose

finstell 10y ago

> 20-30-40% per annum, for over 20 years It is impossible, at least continuously. Nobody has ever managed to do that. You'd be lucky if you could beat the market by a few points on average over a 20 years time period. Compensation well for good performance does not make sense when you aren't penalized for losses.

kristofferR 10y ago
Yeah, the oil fund averages just 0.25% above index, and that's without the extra cost of being actively managed factored in (although its huge size probably makes it impossible for it to be passively managed).
- 010a 10y ago
  Are you aware how much 0.25% of $800 billion dollars is? Now, go ahead and complain about a $60M compensation.
  - robryan 10y ago
    So at this stage factoring in the active management cost they are outperforming the market. Of course we don't know in the long run whether that will continue to be the case.
- ascorbic 10y ago
  It's hard to beat the market when you're bigger than many markets.
avn2109 10y ago
>> "...impossible..." https://en.wikipedia.org/wiki/Renaissance_Technologies https://en.wikipedia.org/wiki/Renaissance_Technologies "...famed for one of the best records in investing history, returning more than 35 percent annualized over a 20-year span..."
- melling 10y ago
  And they used algorithms: https://www.youtube.com/watch?v=QNznD9hMEh0 https://www.youtube.com/watch?v=QNznD9hMEh0
- tormeh 10y ago
  People have done it before. It has always turned out to be luck. Fantastic track record until they cease being lucky. So, cynicism and economic orthodoxy aside, that sounds like a really cool company. Has anyone tried just tossing a big dumb neural network on stock data and investigated whether it can make money? It sounds very obvious, but a quick googling returns little. But I guess the investment industry is pretty secretive by nature.

shiven 10y ago

For example, there are US based asset managers with private funds that generate 20-30-40% per annum, for over 20 years. Pure Horseshit. Plain and simple. Or, in other words: "Pics. Or it didn't happen."

Gustomaximus 10y ago
I dont have pics, but insight. Typically these are funds exclusively for high net worth individuals. They are not advertised. They select who they let in and have limited pools of investment given they invest in areas/business that dont scale to trillion dollar levels type thing. They get to invest in business etc before the open market via their relationships which is I assume why they can get these returns. My source is a friend who is a partner in one of these funds. They average well over 20% return before fees. Typically they want people with $50m investable before your worth the conversation. And the sad thing for people like us is they are typically asked to preserve wealth (aka make sure I'm never poor) and and growth is secondary consideration.
- shiven 10y ago
  So, by its very nature, investing based on access to privileged opportunities. Who's to say it is not based on leveraging privileged information too? In other words, a type of insider trading. Or market pre-loading. Guess public sentiment hasn't caught up to such practices, yet, so they can get away with it. What is the failure rate for such private funds? Obviously, we may never hear of their failures, just as we don't hear of their successes.
  - Gustomaximus 10y ago
    > investing based on access to privileged opportunities I feel you really taking a bias stance here without understanding the mechanics. Yes privilege exists, the same as you friend might tell you a job is opening before its open knowledge. But deals will be shopped about. The big difference is many deals cant reasonably go to the public market. Costs for listing regulations would be significant and unnecessary. Consider, you need to be called as a 'sophisticated' investor even to trade options. This is to protect the public from unscrupulous pyramid schemes and business that carries high knowledge levels to understand what your buying into. It's as much about protecting the public keeping some deals away from open markets as being 'privileged'. > Obviously, we may never hear of their failures If your around this industry you hear plenty of both sides. Bigger ones go to public news like Madoff.