By JLP | March 9, 2006
The front page of today’s Wall Street Journal has a story about a hedge fund manager ($) named Kirk S. Wright. Kirk celebrated his second marriage last October at his fancy home in Atlanta. Atlanta’s top doctors and entrepreneurs along with some retired NFL players attended the affair. They admired his white-granite floors, elevator, and interior glass walls. They ate sushi and lobster and danced on a platform over his pool.
A lot of those who attended the wedding were also investors in his hedge fund firm, International Management Associates LLC, which had reported average annual returns of 27% over the last seven years. It turns out that it was all a sham. According to SEC estimates, of the $115 to $185 million in client money that Kirk managed, only $150,000 can be found! What do you bet that some of that money went to pay for the wedding?
Here’s my thoughts: Be VERY CAREFUL if you are thinking about giving your money over to a hedge fund. Because of the lack of federal oversight, hedge funds can do pretty much anything they want. Your money could be invested or it could just go to fund a lavish lifestyle of the hedge fund “manager” and in most cases you wouldn’t know the difference until it is too late.