Matt Levine, Columnist

Putting the 'Hedge' Back in 'Hedge Fund'

A compensation scheme that updates an asset class.

April 24, 2018 at 6:00 AM UTC

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

Safer, but less lucrative.
Photographer: /Getty Images North America

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This post originally appeared in Money Stuff.

Everyone knows the old chestnut that hedge funds are "a compensation scheme masquerading as an asset class," but arguably that underestimates the power of compensation schemes to transform asset classes. For instance, imagine a compensation scheme in which: