More Money than God: Hedge Funds and the Making of a New Elite

More Money than God: Hedge Funds and the Making of a New Elite by Sebastian Mallaby Bloomsbury HK$325

American hedge fund manager Michael Steinhardt had a knack for reducing his subordinates to tears. 'All I want to do is kill myself,' one sobbed. 'Can I watch?' Steinhardt responded.

That exchange shows just how volatile workplace relations in the sphere can be. Hedge funds are unregulated: they target superwealthy investors with US$1 million or more to play with. Funds are pumped into high-risk, short-term speculation on bonds, currencies, stock options and derivatives. The idea is to win big, earn mammoth profits.

More Money than God claims to tells the inside story of the big bucks funds, from their birth in the 1960s and 70s to their apparently negligible role in the 2007-09 financial crisis.

A senior fellow at the Council on Foreign Relations, Mallaby is also a Washington Post columnist. He spent 13 years on The Economist and eight years on the editorial board of The Washington Post. He is responsible for two other boldly titled books: The World's Banker (2004) and After Apartheid (1992).

More Money than God opens by peering into the mind of A.W. Jones, the vagabond journalist-sociologist and anti-Nazi activist who, after the war, devised the first 'hedged' investment fund. 'Almost by accident,' Mallaby writes, 'Jones improvised an investment structure that has endured to this day. It will thrive for years to come, despite a cacophony of naysayers.'

In Jones' wake came a string of brilliant oddballs. Ken Griffin, the president of Citadel Investment Group, who is said to be one of the world's most successful and secretive traders, started out trading convertible bonds from his dorm room at Harvard.