Hedgehogging is the story of Barton Biggs and his trials and successes in starting his own hedge fund. A hedge fund is basically an unregulated mutual fund that has the ability to invest in just about anything, and short just as often as they buy.
Warren Buffett had one of the earliest hedge funds. They are generally set up as a private partnership between the hedge fund manager (general partner) and a bunch of investors (limited partners). The HF manager may pool all the money together, invest it as he sees fit, and usually takes a very large cut for himself. Buffett took 25% of profits over a 6% return. Today you have to be worth over $1 million just to legally invest in them. Most hedge funds these days charge a 2% management fee, and 20% of profits if they make any money that year. You think the fees you pay for an actively managed mutual fund are high? HF's are ridiculous. Steve Jobs in his best year couldn't make the top 10 in hedge fund manager's pay.
Anyways, Barton Biggs also started one of the first hedge funds, but then went to work for Morgan Stanley in the '70s heading up their research and investment management. In 2003 he and a few others struck out on their own to start a hedge fund, and the book goes through the ups and downs. He describes how the industry works, how absurd the road show circus of raising money is, how absurd hedge fund managers make and spend stupid amounts of money, and generally how to make money in the markets.
Some of the more entertaining portions of the book are his descriptions of other managers and their families. One guy was a jerk to everyone that tried to do business with him. He just wanted to be left alone. But they lived right by a very exclusive club outside NYC and his wife desperately wanted to be a member of the club. It was invite-only. Some members of the club wanted to do business with the husband but he had blown them off. So those members never let this family in. The guy's wife HATED him for it, and she hated watching all her friends drive into this country club every day and she couldn't be a part of the exclusive social circle. These are rich white folks gone full retard, and Barton has enough humor and wit to make it pretty dang funny and entertaining.
