I lived the 2008 crisis, so maybe I'm overly pessimistic about investment managers from what I saw back then. But it seems to me that it's easy to appear respectable when everyone is making money, but true honor is tested in times like these. I mean, look at Melvin, right? He was a wunderkind of how to do things right until he lost some money, and now he's threatening to close his fund and immediately launch a new one, just so he can reset his high water mark. I got a call once from a VC fund manager who wanted to buy some private stock I owned well over the recent raise price, because he had unused cash left over that would otherwise go undeployed. There's just all sorts of slimy things that happen, and Tiger deploying tons of cash into deals that no one else except Insight will do looks a little skeptical.
These are excellent points and I will definitely act on them. Thank you for the wake up call. Fortunately the amounts involved are modest (a few hundred K) but still it is a thing to be more aware of. Another bit of good news is that I am close enough to the fund managers that I can see what they are up to and I have not seen any 'false moves'. But it would still be a very good idea to refresh my knowledge of the various obligations and how the terms might be abused. On the plus side, some of the people on the LP side are heavyweights that would likely be able to make a significant problem for the fund managers if they ever mis-stepped.
