By Leah Spiro
|A hedge fund tale |
By Barton Biggs
Barton Biggs, 78, is a rarity in the financial industry. He’s a hedge fund manager who loves to spill the beans on hedge funds. His first insider take on the industry, "Hedgehogging," published in 2008, was a dark, autobiographical look at his experience launching a hedge fund. Now he’s back with "A Hedge Fund Tale," his first foray into the imaginative realm of fiction. Biggs uses his literary talents to address the question du jour in hedgefund land: What happens to the hedge fund manager who actually earns great returns, marries the woman of his dreams, lives in a 30,000-square-foot mansion in Greenwich, Conn., with two beautiful children . . . but then loses everything after 10 years?
The main character is an African-American man named Joe Hill, whose skills in football and golf help him break into the investment business. Joe starts out in the back office of a Wall Street firm and rises to run a hedge fund, Bridgestone. Biggs makes his hero "an appealing figure. . .I want to show how someone who is fundamentally a sound and admirable character can get sucked into the vortex and be destroyed," Biggs writes in the book’s introduction. Think Bud Fox in Wall Street.
Biggs is a fine writer, a rich man’s Michael Lewis. He clearly relishes writing about what he knows so well: the high end of the hedge fund business and the social whirl of his hometown of Greenwich, where his character Joe buys a house. Writing the novel as a roman à clef, in which real people or events figure in disguise, Biggs uses thinly veiled figures such as the founder of FAC, Steve Brown, who is clearly Steve Cohen at SAC Capital Advisors. His likely Paul Tudor Jones character is Tom Hadron, who started out trading cotton and has a huge hedge fund complex in Connecticut.
Biggs dishes a few inside details about them, but nothing more controversial than describing how Hadron/Jones pays his proprietary traders and how Brown/Cohen’s "$50,000 desk was a single slab of caramel-colored walnut with bronze legs." After all, Biggs, Jones and Cohen all live in Greenwich, which makes it difficult for the author to dish too much dirt.
Biggs is at his best when he describes the obsessive, all-consuming nature of being a money manager and the damage it can wreak in an individual’s personal life. He portrays an industry full of people who have binged on the good life and have now completely lost their bearings. After giving Joe the accoutrements of hedge funddom, Biggs then slowly rips all of them awayâ€”his hedge fund, his elite golf club membership, and, most painfully, his relationships. Biggs draws on rich material from his life, including his 30 years at Morgan Stanley as an investment strategist and the ups and downs launching Traxis Partners in 2003. Biggs’s Traxis was a global macro finalist for AR’s award in 2007, with $1.8 billion at its peak in 2008. (Absolute Return even gets a mention in the book as having profiled Bridgestone.) Traxis, up only 3.4% last year, has had a mixed record and now manages $1.1 billion.
The one shortcoming of the book is the unorthodox mixture of fact and fiction. For example, Biggs includes real charts of real stocks, such as AIG, that indicate when the fictitious Joe bought and sold the stock. While the blurring of the lines between what is true, what is based on truth and what is imaginary allows Biggs to go deeper into his subject, the fact/fiction mashup may turn off some readers. A good part of the book also tells the parallel story of what was happening in the global markets during the book’s time frame.
This cautionary look at the past decade will resonate with many in the hedge fund world."It was the greatest game of all, and the world kept score," the author writes. Bravo to Biggs for giving us a peak inside this secretive, clubby world. AR
Leah Spiro is president of Riverside Creative Management, a literary agency.