Distressed Debt Investing Book Review: The Alpha Masters

Maneet Ahuja's "The Alpha Masters: Unlocking the Genius of the World's Top Hedge Funds" tells the stories and backgrounds of some of the most famous hedge fund managers in the world. Names like Ray Dalio, John Paulson, Marc Lasry, David Tepper, Bill Ackman, and Dan Loeb just to name a few. In my opinion, this is one of the best investing books released this year.

Ahuja does an amazing job of laying out the trials and tribulations these managers had to encounter in their time launching and managing each fund. The reporting here is spectacular. I learned many salient details of each of the hedge fund managers profiled in the stories that I had never read before. For instance, Ahuja noted that Bill Ackman "gave every investor in the Target-only fund a credit for any losses incurred that they could use against any future gains in the Pershing Square main funds." These seemingly small, innocuous facts bring real depth to managers often viewed as money-machine, super humans in the press at large.

One of the great aspects of the book is how Ahuja spents a significant amount of time talking about how each fund initially got started. Most analysts and portfolio managers at buy-side shops across the world (even if they do not admit it) want to start their own fund one day. Its interesting in that each of the fund managers interviewed in the book got to where they are today in wildly different paths. Each are remarkably successful in their own right and each took a unique method to getting where they are today.

This book is not a book on how to invest. It doesn't talk ratios or how to analyze companies. What it does do is lay out how each manager views the different opportunity sets in investing. And again, each manager has a unique world view and set of experiences that offers a paradigm to view the world through. And despite these different paradigms, each fund manager has put up remarkable returns over the years oftentimes investing in wildly different asset classes and geographies.

From the distressed debt investing angle, I was surprised how often the topic was discussed in profiling different managers. Of course the last few years was a bit of a boondoggle for distressed debt investing, it was fantastic to see the thought processes behind David Tepper, Dan Loeb, Marc Lasry and other's view on the crisis and the opportunities it presented to the to make out sized returns.

I would highly recommend The Alpha Masters to readers - very well written, great education in terms of the best manager's investment philosophies, and detailed descriptions of how each of them went from analyst to often-times billionaires.

Disclosure: I requested a copy from the book from the publisher, which they kindly sent to me.


John 8/03/2012  

The Alpha Masters is a very well written book and provides a nice background of some of the giants in the hedge fund world.

Anonymous,  8/03/2012  

I think the Marc Lasry chapter was great, shows you thoughtfulness and process of a very disciplined investor "we invest when we have conviction in the credit and we believe it's cheap. if it gets cheaper, then we buy more..."


hunter [at] distressed-debt-investing [dot] com

About Me

I have spent the majority of my career as a value investor. For the past 8 years, I have worked on the buy side as a distressed debt and high yield investor.