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The article focuses on the hedge fund Spruce Alpha, created in 2014 and managed by Spruce Investment Advisors. The authors discuss the fund's complex trading strategy, examine its loss for investors during the August 2015 stock market turmoil, and explore how money managers can better manage new hedge funds.

Two weeks from now, a seven-year-old hedge fund called Alson Capital Partners will return around $800 million to its investors, and shut its doors for good. The fund was founded and managed by Neil Barsky, 51, a former Wall Street Journal reporter-turned-Morgan Stanley analyst, who started his first hedge fund in 1998, just as the ''hedge fund decade'' was gaining steam. He was an old-fashioned stock picker who ran Alson Capital as a classic ''long-short'' stock fund, meaning that he bought companies he thought had good long-term prospects, while shorting companies he thought were likely to fall off the cliff. At its peak, Alson Capital had $3.5 billion under management, charged a 1.5 percent management fee, took 20 percent of the profits, and, when you include Mr. Barsky's predecessor fund, produced compounded annualized returns of 12.11 percent a year. It's fair to say he's made a pretty penny. [ABSTRACT FROM PUBLISHER]