Alpha abounds
There have been plenty of recent reports suggesting that an influx of new hedge fund managers is eroding opportunities to generate alpha. Barry Schachter, however, argues that these claims are greatly exaggerated
Chapter 1 of Barton Biggs' new book, Hedgehogging1, contains a fictionalised discussion on the current state of hedge fund alpha. One participant begins: "The alpha pool of the whole hedge fund industry is not growing, but the number of guys trying to drink from it is." To which Biggs replies: "I am not so sure the alpha pool is not growing ... new, naive, trigger-happy crazies (will cause blow-ups that) will expand the alpha pool for the rest of us."2
The future of alpha is not just an investor
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