For all the swollen egos, high stakes and sky-scraping fees that color the hedge fund world, it's really a pretty forgiving place. Call it the land of second chances.
This tendency to forgive and forget is highlighted now with the anticipated launch of a hedge fund by David Berkowitz, the former partner of Bill Ackman in Gotham Partners. (Not to be confused with David Berkowitz the serial killer, who is still in prison and not getting a second chance.)
The details of Berkowitz's new venture are reported this month on p. 6. Many in the industry will remember what happened to his last one: After producing a streak of 40% investment gains, Gotham began loading up on private equity, and its returns fell into negative territory.
At the same time, the U.S. Securities and Exchange Commission and the New York State Attorney General, at the instigation of a company shorted...