13 ms·
A hedge fund manager told me the whole investment industry is a net cost of 1-2% of global GDP per annum. I don't specifically what study that number came from,
by kitcar 8y ago
A hedge fund manager told me the whole investment industry is a net cost of 1-2% of global GDP per annum. I don't specifically what study that number came from, but if true its likely one of the main reasoms many see it as a waste.
- pongogogo 8y agoIf you computed a weighted average of all hedge fund returns, you would get a global contribution to GDP. Since hedge funds often don't publish their returns, and it's well known that there's huge amounts of survivorship bias in the data, it would be very difficult to measure accurately. My feeling though is that the contribution would be close to zero, as most of the strategies they pursue are arbitrage based and are zero sum, not wealth creating (with some known exceptions, such as venture capital etc).
- jshaqaw 8y agoArbitrage is another way of saying eliminating mispricings. Mispricings or traded assets causes a misallocation of societal resources in ways which are negative to economic growth. You need to think second order here.