Rock star hedge fund managers doomed to fail?

When big name executives leave big banks to form hedge funds (hedge fund news), they generate big headlines and huge expectations. The latest example is Pierre-Henri Flamand, the 39-year-old star trader who has announced he will leave Goldman Sachs to start a fund.

But Business Week/Bloomberg has a warning for him and his investors: "Celebrity fund managers usually crash eventually. They attract too much money, they get caught up in their own hype, and many of them weren't much good to start with. The lesson for investors is that if they want to invest in a hedge fund, the more obscure it is, the better."

This doesn't always hold true. Eric Mindich, another Goldman Sachs alum, has fared well on his own. But according to a recent study, the big names, as measured by the amount of media they receive, have generally underperformed those who have generated much less coverage. 

For more:
- here's the Business Week article

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