Most hedge fund managers shy away from the spotlight. Not Barton Biggs. In 2003 the 30-year Morgan Stanley veteran gave up a lucrative, prestigious gig as that firm’s investment management chairman and global market strategist to return to the hedge fund business, launching Traxis Partners, a value-oriented global macro fund. Biggs helped start one of the earliest hedge funds, Fairfield Partners, back in 1965, eight years before Morgan Stanley recruited him to start its research department. During his second go-round in the hedge fund world, he began to cast a gimlet eye on the antics and agonies of his fellow managers -- and taking notes.
The result is Hedgehogging, an insightful, engaging and often hilarious first-person account of the hedge fund industry that is being published this month by John Wiley & Sons. Biggs, 72, changed many managers’ names to protect the not-so-innocent. The book demystifies an industry whose practitioners guard their privacy with a passion that sometimes borders on paranoia.
Biggs cheerfully debunks the notion that top managers have supernatural powers of investment, revealing instead their competitive egomania. In one anecdote a successful fund pilot, upon missing a golf shot, pounds his club repeatedly into the ground, whacks it against a tree and finally hurls it into a nearby lake -- all without uttering a word.
“Hedgehogs are intriguing animals,” Biggs writes, “and hedge hogging, the never-ending search for investment acorns, often reveals the best and the worst of the species.” (For an excerpt of the book, see the January-February issue of our sister publication, Alpha.)
Biggs says that working on the book helped release the pressure he felt while slogging through meetings with potential investors, selling Traxis as an independent asset manager. Today the firm, which started with about $390 million in assets, oversees more than $1.5 billion. But in Traxis’s first year, Biggs writes, he and his team suffered “multiple anxieties and indignities.” That experience moved him to write.
“The first year of a hedge fund’s existence is really the crucial life-or-death moment,” Biggs tells Institutional Investor. “You’ve got to perform, because if you don’t, you’re not going to go back to the fancy job you had before; you’re going to be running a restaurant in San Francisco.”
If things ever go south at Traxis, at least Biggs will have a writing career to fall back on.
