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
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
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.
Leah Spiro is president of Riverside Creative
Management, a literary agency.