Originally Posted by
lerasp
i heard a bizarre (to me) story that a fund of funds manager told me. he said that they were considering investing with a certain hedge fund and while doing their research learned that the HF manager broke his lease at one point. They didn't invest based on the logic that someone who voluntarily break a contract can't be trusted with clients' money. i personally think that's taking things waaay to far, but here you have it.
Originally Posted by
monitor
They are operating on the principle that "once a deadbeat always a deadbeat." In this case, it may have been a scosh too judgmental but I think that somebody who thinks that is "taking things waaay to [sic] far" needs a bit more experience in business.
I think you may be judging this story without the benefit of context. It may very well be that the investors recognize that any one can have a blemish on his record, but given the choice of investing with someone with an unblemished record and with someone with a blemished record, most would opt for the former over the latter absent some overriding factor (e.g., a dramatically better investment history). At least in today's market, investors hold the cards and generally have the flexibility to choose with whom they invest, whereas not too long ago hedge fund managers (at least many of the more reputable ones) were turning away investors. So it may very well be that they don't consider this guy to be "a deadbeat," but that they have too many alternatives to even take the time to worry about whether this guys is a deadbeat or not.