Thomas Zucosky, one of the true veterans of hedge fund investing, joins Opalesque founder Matthias Knab for a candid and wide-ranging conversation on four decades of financial innovation, hedge fund evolution, and investment philosophy.
From his start in 1981 on the 104th floor of the World Trade Center to allocating to legends like Soros, Robertson, and Cohen, Zucosky shares a front-row seat to the institutionalization—and disillusionment—of hedge fund investing.
He explains why today's alpha is increasingly hard to find, why most investors misunderstand risk, and how his current model at Lucidity avoids commingled vehicles in favor of direct, transparent, and liquid managed accounts.
You’ll learn:
- Why hedge fund access used to be an insider’s game—and how the internet changed everything
- How alpha generation shifted as funds grew and drifted from their roots
- Why “big is bad” for alpha, and how today’s leverage-heavy multi-strats are masking true returns
- The three pillars of multi manager investing 2.0: Transparency, Liquidity, Control
- Why Zucosky swore in 2008 to never again invest in a commingled hedge fund
- What makes a trader worth backing—and how Lucidity finds them before others do
A masterclass in manager selection, behavioral insight, and modern portfolio construction—this is a must-watch for any investor still searching for real alpha.
LIVE SESSION WITH THOMAS ZUCOSKY JULY 8th
Join the Opalesque SKILLSLAB Investor Workshop “Multi-Manager Investing 2.0: How Lucidity Capital reinvented the model” with Thomas Zucosky on July 8th 11 am ET (4pm GMT, 5pm CET, 6pm Riyadh, 7pm Dubai, 8:30pm Delhi). A replay link will be provided to all registered participants.
Secure your seat here: https://www.opalesque.com/webinar
Today’s video is divided into the following chapters:
00:00:59 - Chapter 01
Why Wall Street was a dead-end career in 1981
… but the creation of financial futures and options kickstarted a new era
From hedge fund founder to Head of Manager Due Diligence, investing with the who-is-who of hedge funds
00:06:37 – Chapter 02
The Access Game:
Who bought hedge funds and hedge fund of funds in the 1980’s and 1990’s, and how?
00:11:04 - Chapter 03
Fewer hedge funds, less assets, more alpha
How surging assets changed hedge funds
00:13:47 – Chapter 04
How to recognize style drift
How the internet killed the information arbitrage early hedge funds profited from
The come-back of global macro funds
00:16:42 – Chapter 05
The Institutionalization of Hedge Funds: Unsolved themes:
- The Fee dilemma
- The Alpha dilemma
- The Monitoring dilemma
00:22:19 – Chapter 06
Is there a right way to invest in hedge funds?
Why hedge fund indices are completely meaningless
00:25:09 – Chapter 07
How to invest in hedge funds today?
The raise of the multi-strats and the role of leverage
Where do exorbitant fees leave investors?
00:29:55 – Chapter 08
Why Tom Zucosky “will never invest in a commingled vehicle again” – as long as he lives
The multi-manager model 2.0: The virtual prop trading org
00:34:33 – Chapter 09
Empowering the investor with TLC:
Transparency, Liquidity, Control
Access to highly experienced portfolio managers who prefer to operate on their own, often reluctant to join traditionally structured multi-manager set-ups
00:40:05 – Chapter 10
Why investing is also a behavioral skill
Big is bad in the production of alpha
00:42:06 – Chapter 11
Building uncorrelated portfolios aiming for sustainable alpha
How to know traders: 1 to 2 degrees of separation
00:45:20 – Chapter 12
How Tom Zucosky finds new traders – and conviction
Not afraid to be the first investor backing a trader
00:48:42 – Chapter 13
Experience through market cycles
Willing to take managed accounts
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A 40+ year veteran of alternative investments with one of the finest networks to source trading talent, Tom pioneered the SMA-based multi-strategy model at Discovery Capital in the 1990s. At Lucidity, he’s refined it further, leveraging technology to deliver real-time oversight of 15+ specialist PMs—each vetted for alpha generation and risk discipline.
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