Insitutional Investor's Alpha Magazine has created a hedge fund Hall of Fame, featuring interviews.
This quote from David Swensen struck me:
At Yale the most important shift in vetting hedge fund managers over the past 15 or 20 years has been an increasing focus on the character and quality of the investment principals.
Years ago, I would have talked about this investment characteristic or that objective factor. Now we focus overwhelmingly on assessing the managers running the business. The fundamental question is, Are these people you want to be partners with? I think it really comes down to individual characteristics.”
It recalls something J.P. Morgan famously said (more like growled) at a Senate hearing. Someone asked him on what basis his firm extended credit and he replied: "The first thing is character . . . Before money or anything else. Money cannot buy it . . . Because a man I do not trust could not get money from me on all the bonds in Christendom."
It also reminds me of a recent conversation I had with a hedge fund manager I know, who said he weighs the quality of the businesses in which he invests over the quality of their managements. I pointed out--pretty cleverly I thought--that while he chooses to do that in his investing, in his own "business"--owning and operating a money management organization--he does, and asks his clients to do, exactly the opposite.