Hedge fund are organizations designed to take money from wealthy investors and—through sophisticated financial wizardry—use that money to enrich hedge fund managers. Shockingly, many professional investors believe hedge fund managers are overpaid.

Bloomberg reports on the latest of what has become an ever-present low-level grumbling about the fact that the way hedge funds get paid is, you know, insane. (The old standard, which is often negotiated downwards now, is hedge fund managers get 2% of assets and 20% of profits per year, so even if they lose money for their investors they can still reap huge paydays.) Today's complain comes from Nicolas Rousselet, who invests $2 billion in dozens of hedge funds on behalf of his firm's clients, who told Bloomberg, "Fund managers should be remunerated when they perform. They should not be remunerated for doing nothing."

A fairly uncontroversial position, in most fields. Not in hedge funds! Which have been having a bad decade! We should note here that the only ripoff bigger than investing in hedge funds is investing in funds of hedge funds, which charge investors an extra fee on top of the hedge funds' own fees in order to select various hedge funds to invest in. That is the kind of place that Nicolas Rousselet works. I guess you can look at this as: even the ripoff artists have a problem with the extent of the ripoff artistry of the hedge fund industry. Why hasn't the entire industry of sophisticated professional financiers smashed the ripoff hedge fund model? Because they're not paying, their investors are. And why do investors persist in paying these exorbitant fees for a tiny chance of reaping a huge return? For the same reason that much poorer people buy scratch-off lottery tickets.

If only Karl Marx had come up with hedge funds run by the proletariat we never would have had all those revolutions.

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