Why you can't trust the fund fat cats

Hedge fund managers: they pay themselves multi-million pound bonuses when things go well, but they aren't penalised when they do badly. That's why you should always be wary of the financial-services industry.

An old client from my stockbroking days has just sent me a chart of the performance of a hedge fund run by some people he doesn't seem to like much.

The chart shows the fund doing fantastically well until the middle of 2005. Then it shows things falling off nastily throughout 2006. Anyone who invested in 2003 and 2004 is more or less even. Anyone who invested after that has lost a lot of money if you gave the fund your cash at the peak you'd be down about 30%.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.