The Alpha Masters: Unlocking the Genius of the World's Top Hedge Funds [Hardcover]

Maneet Ahuja (Author), Myron Scholes (Afterword), Mohamed El-Erian (Foreword)

Book Description

Publication Date: May 29, 2012

The ultimate behind-the-curtain look at the hedge fund industry, unlocking the most valuable stories, secrets, and lessons directly from those who have played the game best.

Written by Maneet Ahuja, the hedge fund industry insider, The Alpha Masters brings the secretive world of hedge funds into the light of day for the first time. As the authority that the biggest names in the business, including John Paulson, David Tepper, and Bill Ackman, go to before breaking major news, Ahuja has access to the innermost workings of the hedge fund industry. For the first time, in Alpha Masters, Ahuja provides both institutional and savvy private investors with tangible, analytical insight into the psychology of the trade, the strategies and investment criteria serious money managers use to determine and evaluate their positions, and special guidance on how the reader can replicate this success themselves.

There are few people with access to the inner chambers of the hedge fund industry, and as a result it remains practically uncharted financial territory. Alpha Masters changes all that, shedding light on star fund managers and how exactly they consistently outperform the market. The book:

• Contains easy-to-follow chapters that are broken down by strategy--Long/Short, Event Arbitrage, Value, Macro, Distressed, Quantitative, Commodities, Activist, pure Short, Fund of Funds.
• Includes insights from the biggest names in the trading game, including Ray Dalio, Marc Lasry, Jim Chanos, Sonia Gardner, Pierre Lagrange, and Tim Wong.
• Features contributions from industry icon Mohamed El-Erian

Many of the subjects profiled in this groundbreaking new book have never spoken so candidly about their field, providing extremely provocative, newsworthy analysis of today's investing landscape.

Editorial Reviews

Amazon.com Review

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Guest Review of The Alpha Masters by Ben Mezrich

"Maneet Ahuja's The Alpha Masters is a must-read for anyone working on Wall Street--or anyone planning to work on Wall Street. Getting even one of these titans of the industry to talk on record would be an impressive feat (and I know this because I've tried unsuccessfully to interview at least two of the people featured in here!), but getting all of them together in one place is simply herculean. Maneet quite clearly has the magic touch, and The Alpha Masters kept me busy on a round trip to Vegas, with a few extra hours on the tarmac. Great work, fun read, and a unique, fresh voice." --Ben Mezrich is the author of twelve books including the New York Times best sellers Bringing Down the House, which was adapted into the movie 21, and The Accidental Billionaires, which was adapted into the Oscar-winning movie The Social Network.

Ben Mezrich

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Q & A with Maneet Ahuja, author of The Alpha Masters: Unlocking the Genius of the World's Top Hedge Funds

Maneet Ahuja

What is The Alpha Masters about?
The Alpha Masters lifts the curtain on the notoriously private hedge fund industry and reveals valuable stories, secrets and lessons directly from the world's top investors. I wrote the book during one of the most volatile years in the U.S. markets. Through firsthand interviews and unprecedented access, each chapter profiles one of the biggest and most successful names in the industry, specifically including Ray Dalio, John Paulson, David Tepper, Bill Ackman, Marc Lasry and Sonia Gardner, Dan Loeb, Jim Chanos, Boaz Weinstein, Pierre LaGrange and Tim Wong.

You had unprecedented access to these managers through the course of writing The Alpha Masters. Why do you think you were able to "go behind the curtain"?
As any good journalist will tell you, when you focus on the facts and developing your story, the rest will follow. My objective in writing The Alpha Masters was to dig deep into the backgrounds and investment philosophies of some of the world's greatest investors in order to really tell their stories for the first time. As a producer at CNBC for over four years, I have slowly built strong relationships and trust with these investors which I have now taken several steps further with the publishing of The Alpha Masters.

I believe I was able to "go behind the curtain," so to speak, because all of my subjects believed there were extremely valuable lessons to be learned from their extensive experiences and insights. Hopefully readers of the book will agree and be able to put some of the philosophies shared in the book into practice in their own lives and portfolios!

Why are hedge funds such a mystery?
There are a few key reasons, but foremost, the general public doesn't have the ability to invest in hedge funds because they are restricted to "accredited investors" under Regulation D of the Securities and Exchange Commission. This usually means an individual with net worth of at least $1 million or annual income over $200,000.

Also, hedge funds have only been around for less than a century. While there are a lot of mixed opinions--even among the investors profiled in the book--about what actually constitutes a hedge fund, the investment strategies are complex and believed by many to contain marks of genius. Thus, hedge fund managers have historically shied away from publicly explaining their methods, not only because they are difficult to understand, but from fear of giving away the secret sauce.

Who should read this book?
This book is for investors, market participants, business students, and anyone curious about the markets and interested in a "hedge- ucation."

You interviewed some of the top hedge fund managers in the world. What defining characteristic do you think stands out among them?
In one word? Drive.

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Review

'...this is a well written book about some of the more colourful figures in the world of high-stakes investing. Anyone looking for a decent holiday read could do a lot worse' (Money Week, June 2012) 'There is not a dull moment, and one may even come out a much wiser investor by the end of the book.' ( eVestment|HFN , June 2012) 'Using savvy and psychological understanding she fully grasps the nature behind the secretive trade, and gives the reader guidance to replicate success.' (European CEO, 1st August 2012)

See all Editorial Reviews

Product Details

• Hardcover: 272 pages
• Publisher: Wiley; 1 edition (May 29, 2012)
• Language: English
• ISBN-10: 1118065522
• ISBN-13: 978-1118065525
• Product Dimensions: 6.4 x 0.9 x 9.4 inches
• Shipping Weight: 1 pounds (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (52 customer reviews)
• Amazon Best Sellers Rank: #52,792 in Books (See Top 100 in Books)

More About the Author

Maneet Ahuja is CNBC's hedge fund specialist and a producer on Squawk Box. In 2011, she co-created and developed the network's "Delivering Alpha" hedge fund summit in conjunction with Institutional Investor and was awarded CNBC's prestigious Enterprise Award in 2009 for her groundbreaking coverage of the industry. She has covered the World Economic Forum in Davos, Switzerland, and produces quarterly shows at the Department of Labor with former Federal Reserve Board chairman Alan Greenspan as well as U.S. Competitiveness Summits at Harvard Business School. Prior to joining CNBC in 2008, she was a part of the Wall Street Journal's Money & Investing team. She began her career on Wall Street in 2002 at age 17 in Citigroup's Corporate & Investment Banking division as a credit risk analyst.

Maneet is one of Forbes magazine's 30 Under 30 (Jan. 2012), has been featured in Elle magazine's annual Genius issue (April 2011), and in 2010 was nominated for Crain's New York Business Forty Under 40 Rising Stars. Follow Maneet on twitter @WallStManeet.

Most Helpful Customer Reviews

61 of 64 people found the following review helpful

1.0 out of 5 stars Hype for Hedge Funds August 6, 2012

By auilachs

Format:Hardcover|Amazon Verified Purchase

This is a very odd book - only suitable for pop-culture enthusiasts. "Alpha" suggests risk adjusted returns to investors - not to their investment managers. However, the whole text is a glowing tribute to the wealthiest investment managers. The wealthiest managers are those who have raised the most assets from the public, but every study on the topic indicates that smaller funds are better for investors. Why does this matter? As the old saying goes, "where are the investors' yachts?" I have been reading financial publications from a full array of sources (everything from WSJ/ pop-culture texts to juried academic publications/PhD dissertations) for 28-years. "The Alpha Masters" really belongs at or near the bottom of the quality pile. The book is largely a snap-shot biography of the wealthiest hedge-fund managers, with no regard to their clients' results. The text includes a photo-insert of billionaire investment managers enjoying hobbies like playing chess, fishing, scuba-diving, and hiking around volcanos. Maneet's photo (she is the author) incorporates a plunging neckline, and her descriptions of her interviews read like Cosmo or Vogue ("...he was dressed in...", "...we had Diet Coke and turkey sandwiches...", "... the plush carpets..."). Many readers will also find the abundance of clichés more distracting than a sound bite from a professional athlete. She writes: "The journey is the process...and it often takes a good deal of back-and forth before decisions are finalized." Good job, Maneet! Way to give 110% for the team when everything was on the line! If you are a high-school student who needs to do a book report over a weekend, OR if you need to line a cat box/bird cage - this text would be an excellent choice for either task. If you are in the industry, or a potential hedge fund investor, you will be very disappointed by this book. That said, "The Alpha Masters" is probably the most intellectual effort CNBC's "Squawk Box" has ever attempted. Booyah - Maneet! Hopefully, you won't get busted by the SEC with Cramer and Maria B. As for how Maneet accessed such extraordinary opportunities - beginning as a teenager - well, I don't fully understand. However, I suspect that she might just know how to exploit "alternative assets" better than any of the managers she profiled. The afterword by the legendary Myron Scholes is hilarious. He notes that she misunderstands the word "alpha", and he writes "I don't know how she was able to assemble this amazing group (or even how she got me to write this afterword)..."

69 of 81 people found the following review helpful

3.0 out of 5 stars Another Book Review from the Aleph Blog May 20, 2012

By David Merkel

Format:Hardcover

Would you like to understand the mindsets of a variety of successful hedge fund managers? This book will give that to you, but there is a catch: you will also learn how these managers developed, and this is a big plus.

Most of the managers went through rigorous experiences that made them far more effective at evaluating risk and return potentials. Have you been through anything similar to that? If not, you might read this very interesting set of accounts, but then realize that you don't have the personality/skills necessary to replicate what they have done. Don't feel bad, most people don't have that.

A large part of what makes hedge fund managers successful is their willingness to limit their activity to areas where they have genuine expertise. They gain insight beyond most into areas where they are experts in discerning value.

This book does not give you a formula for how to make money; instead, it gives you lessons in the characters of those that have made a lot of money for themselves and their clients. What are they like?

Among their many attributes, they are:

Driven/competitive -- though I have known my share of failures in investing that have that attribute.
Lifelong learners, like Buffett and Munger -- though I have known some really bright people who know a lot about investing/finance who add little to an investment process.
Opportunistic -- they recognize what their best opportunities are, and pursue them to the exclusion of others.
Focused -- they develop an edge, and try to be "best in class," whether in mathematics of the markets, understanding the legal rights of different types of securities, understanding industry dynamics, accounting nuances, etc.
Patient -- if opportunities are not promising, don't do much. It's like being an intelligent underwriter -- when your competitors are giving away the store, don't write business, spend time sharpening your skills. Study what could go wrong, and see if there is a way to take advantage of the situation.
Team-builders -- They develop talented teams/cultures and motivate them to excellence.
Sensible -- They know when to be doggedly persistent, and know when to admit defeat.

Now, no hedge fund manager has all of these, but the best have most of them.

Contents

The book covers nine managers/firms:

Ray Dalio -- Bridgewater
Pierre LaGrange & Tim Wong -- MAN Group / AHL
John Paulson -- Paulson & Co.
Marc Lasry and Sonia Gardner -- Avenue Capital Group
David Tepper -- Appaloosa Management
William A. Ackman -- Pershing Square Capital Management
Daniel Loeb -- Third Point
James Chanos -- Kynikos Associates LP
Boaz Weinstein, Saba Capital Management

About the Author

Her name is Maneet Ahuja, and is a producer for CNBC, specializing in covering hedge funds. That's how she gained the contacts in order to write the book. Business Insider did a profile on her, and you can find it here.

Quibbles

The book needs something to tie it together and give it depth, otherwise the book is only "Meet these nine nifty hedge fund managers that I have gotten to know." That's a serious deficiency; even a single chapter at the front or back would have enriched the book, making it more general and cohesive.

I also think there would have been better choices for those that wrote the foreword (Mohamed El-Erian) and the afterword (Myron Scholes). The former is an accomplished investor, but is not an expert on hedge funds. Myron Scholes is an accomplished academic, has worked for hedge funds, but is still not an expert on them.

Who would benefit from this book: If you want to learn about what type of people these nine hedge fund managers are, and read anecdotes about some of their best and worst trades, this would be a book you would enjoy.

33 of 37 people found the following review helpful

1.0 out of 5 stars The Forward is Excellent, but ... June 19, 2012

By Walter

Format:Hardcover|Amazon Verified Purchase

I had just finished Scwager's "Hedge Fund Market Wizards" and was really looking forward to a continuation of a well written, intellectually stimulating look into the Hedge Fund world. The forward to Alpha Masters is Excellent and I was energized, but I couldn't finish the first chapter, or any other one for that matter. Schwager and Ahuja set out on a common theme ... bring the manager's persona, his strategies and methodologies to the reader. Schwager succeeded and delivered a stimulating scene setting intro, incredible dialogue and high level summary of each manager. As far as Alpha Masters, I agree with some of the other comments: it is poorly written, superficial and disjointed in its analysis and full of metaphors and anecdotes that do not serve any purpose. The books shared at least one common "Master" and / or "Wizard". The level of insight delivered by Scwager was phenomenal, Alpha Masters fell flat.

So ... If you are looking for a book that is undersold and over delivers, I cannot recommend Alpha Masters. To add some context, I have spent the last 25 years of my career in the institutional capital markets. Others may enjoy it, but I wish I had read the reviews before I "one-clicked" Alpha Masters!