A Quote by Jack Reed
Hedge funds, private equity and venture capital funds have played an important role in providing liquidity to our financial system and improving the efficiency of capital markets. But as their role has grown, so have the risks they pose.
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State funds, private equity, venture capital, and institutional lending all have their role in the lifecycle of a high tech startup, but angel capital is crucial for first-time entrepreneurs. Angel investors provide more than just cash; they bring years of expertise as both founders of businesses and as seasoned investors.
Wall Street, with its army of brokers, analysts, and advisers funneling trillions of dollars into mutual funds, hedge funds, and private equity funds, is an elaborate fraud.
I delivered lectures, and I was also a consultant for international companies in finance, both private equity and big venture capital funds.
Improving oversight of hedge funds and other private funds is vital to their sustainability and to our economy's stability.
Citadel's Capital Market division plays an important role in our nation's financial markets. Our broker-dealer is the largest market maker in options in the United States, executing approximately 30 percent of all equity option trades daily.
The financial capital is being concentrated by corporations, institutional investors, and even our pension funds, and being reinvested in companies that repeat this process because it provides the highest return on that financial capital.
Venture capital has peaked in terms of its appetite, in terms of how much money it wants to put in. So now private equity funds are piling in. Primarily because interest rates are virtually zero so there's no fixed income play and they're not moving around.
For most Indians in America, wealth is not inherited. Neither do we make it as heads of large hedge funds and private equity funds. For us to make it to the top, we have to use our knowhow to create great new technology products and build high-tech companies.
It's important that we educate Americans about how hedge funds and private equity play completely different roles.
In 2008, people who invested in hedge funds needed capital badly, but many of the funds would not return their money. However, I gave money back to any investor who requested it. It was the bottom of the market and a pretty tough time.
Among other objectives, liquidity guidelines must take into account the risks that inadequate liquidity planning by major financial firms pose for the broader financial system, and they must ensure that these firms do not become excessively reliant on liquidity support from the central bank.
When I was 23, 24, I started covering hedge funds - a lot of this was luck - when no one else did. This was before hedge funds were the prettiest girl in school: this was pre-nose job and treadmill for hedge funds, when nobody talked to them - back then, it was just all about insurance companies and money managers.
Hedge funds are a very efficient way of managing money. But there are clearly some risks. Hedge funds use credit and credit is a source of instability. Transactions involving credit should be regulated.
Our economy is a plantation run for the aristocrats - the CEOs, hedge funds, private equity firms - while the field hands are left with the scraps.
I'm struck by the fact that by and large equity capital doesn't play a big role in new financing; it's either bonds or internal financing but not really equity. And therefore, it's not clear that anything which improves the equity markets has really much to do with the productivity of the economy as a whole.
I would much rather invest in stocks, bonds, private equity and hedge funds than watches.
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