|The Alpha Masters: Unlocking the Genius of the World’s Top Hedge Funds |
by Maneet Ahuja
John Wiley & Sons
Maneet Ahuja has done as much as anyone to make hedge fund managers household names. She is CNBC’s in-house hedge fund specialist and a producer for the morning show “Squawk Box,” where investment gurus make pronouncements on the state of the world. Through sheer persistence, she has persuaded numerous hedge fund titans to appear on the show, including Ray Dalio, founder of Bridgewater Associates, and David Tepper, the founder of Appaloosa Management. Ahuja has leveraged her hard-won access to these stars, along with John Paulson, William Ackman, Boaz Weinstein and other luminaries, for her new book, The Alpha Masters: Unlocking the Genius of the World’s Top Hedge Fund Managers, a paean that invites the uninitiated to come and worship.
In a way, Ahuja’s preface about her own entry into the hedge fund world is the freshest story in the book; at least her rise from 17-year-old Citigroup intern to 27-year-old star-wrangler hasn’t become daily business media fodder the way her subjects have. Since her early landing in Manhattan’s power center from her home in Westchester county — “where there were practically more deer than people” — she has lost none of her infatuation with the world she inhabits. “I was privileged enough to see them during periods of stress, moments of reflection, and flashes of sheer genius,” she writes of her subjects. Her privileged perch allows her to lunch on spicy tuna rolls with Tepper at the offices of Appaloosa, which “have the air of a very high-end frat house,” and to “talk easily” over Diet Cokes with John Paulson in a room that has a plush cream carpet.
Though the book is a tad heavy on what hedge fund managers eat for lunch and their favorite investment homilies, Ahuja does dig into the trading tactics that propelled her subjects to the top and how they arrived at some of their riskiest decisions. She tells of how Paulson, alarmed by weak credit underwriting standards, took his much-celebrated stand against some $25 billion in subprime securities and earned 600 percent. She illustrates how Tepper foresaw that the U.S. government wasn’t going to let the banks fail, so he loaded up on bank securities and made more than $1 billion. And she recounts how activist fund manager Ackman flipped burgers at a McDonald’s with his eldest daughter to learn the business before he embarked on his successful campaign to get the fast food chain to sell or spin off their company-operated stores to franchisees.
For the most part these are already well-known stories, packaged here for a mainstream audience. Ahuja’s connections netted her a foreword by Mohamed El-Erian, PIMCO CEO and co-CIO, who makes it clear this is a primer. He writes: “After reading this book, you will possess a better understanding of the mysterious world of hedge funds. ” An afterword Nobel laureate Myron Scholes says, more cryptically, that the subjects “provide great material for the investor’s People magazine.”
The trouble is, an author who writes a book about the most larger-than-life investors is entering what portfolio managers themselves would call “a crowded trade.” The Alpha Masters is a collection of profiles, which Ahuja has admitted in media interviews were reviewed by the subjects, and not a tale of trading as high-stakes drama like Michael Lewis’s The Big Short: Inside the Doomsday Machine. Unlike Simon Lack’s The Hedge Fund Mirage: The Illusion of Big Money and Why It's Too Good to Be True, which reveals things hedge fund managers don’t want investors to know, Ahuja divulges what her subjects want readers to know. On the other hand, Ahuja has found a nifty way to preserve her capital as a hedge fund devotee.