from Greenberg Center for Geoeconomic Studies

More Money Than God

Hedge Funds and the Making of a New Elite

The first authoritative history of hedge funds; from their rebel beginnings to their role in defining the future of finance.

Foreign policy analyses written by CFR fellows and published by the trade presses, academic presses, or the Council on Foreign Relations Press.

Read an excerpt of More Money Than God.

In the aftermath of the global financial crisis, policymakers in the United States and around the world have focused on the problem of "too big to fail" institutions, debating remedies ranging from higher capital requirements to proposals to break up large banks. In his book, More Money Than God: Hedge Funds and the Making of a New Elite, CFR Senior Fellow Sebastian Mallaby argues that governments should instead encourage small-enough-to-fail hedge funds. Between 2000 and 2009, a total of about five thousand hedge funds went bust, but because they were too small to threaten the financial system, not a single one required a taxpayer bailout.

More on:

Financial Markets

Corporate Governance

United States

The author, director of CFR's Maurice R. Greenberg Center for Geoeconomic Studies, writes that, despite the failure of these five thousand funds, the hedge fund sector as a whole survived the 2007–2008 mortgage bubble extraordinarily well compared with the banking industry. Mallaby outlines four reasons for this stark contrast:

  • Regulation. The capital requirements on banks that accept deposits are intended to shore up the solvency of such institutions but, in some instances, allow banks to run their books in ways that the requirements suggest are safe, even when they are not. Conversely, hedge funds are far more likely to make their own risk decisions and thus frequently fared better.
  • Incentives. "When [bank] traders take enormous risks, they earn fortunes if the bets pay off. But if the bets go wrong, they don't endure symmetrical punishment—the performance fees and bonuses dry up, but they do not go negative. . . . Hedge funds [on the other hand] tend to have 'high-water marks': If they lose money one year, they take reduced or even no performance fees until they earn back their losses."
  • Distraction of multiple profit centers. "The banks' proprietary trading desks coexisted alongside departments that advised on mergers, underwrote securities, and managed clients' funds; sometimes the scramble for fees from these advisory businesses blurred the banks' investment choices."
  • Culture. "Hedge funds live and die by their investment returns, so they focus on them obsessively. They are generally run by a charismatic founder, not by a committee of executives: If they see a threat to their portfolio, they can flip their positions aggressively."

Drawing on unprecedented access to the industry, including three hundred hours of interviews and binders of internal documents, Mallaby charts the history of hedge funds, telling the stories of the industry's pioneers, from the undercover anti-Nazi activist A.W. Jones, to the philosopher-financier George Soros, to the cryptographer and mathematician James Simons. He concludes that to a surprising and unrecognized degree, "the future of finance lies in the history of hedge funds."

A Council on Foreign Relations Book

Educators: Access More Money Than God's Teaching Module.

More on:

Financial Markets

Corporate Governance

United States

Reviews and Endorsements

Recipient of the 2011 Gerald Loeb Prize

Finalist for the 2010 Financial Times/Goldman Sachs Business Book of the Year Award

Mallaby's smart history of the hedge fund business explains how finance's richest moguls made their fortunes and argues that the oddballs of the hedge fund world are Wall Street's future, and possibly its salvation.

New York Times, Paperback Row


David Brooks, New York Times

An enormously satisfying book: a gripping chronicle of the cutting edge of the financial markets and a fascinating perspective on what was going on in these shadowy institutions as the crash hit.


Colorful reading.


[A] smart history of the hedge fund business . . . should be required reading this summer.

New York Times Book Review

Mallaby manages to dramatise even heavily raked-over incidents, such as Paul Jones's anticipation of the 1987 stock market crash, or George Soros's successful assault on the Bank of England in 1992. He gets into the minds of the traders . . . and adds extensive historical and academic context without interrupting the highly readable narrative.

Financial Times

A superbly researched history of hedge-fund heroes stretching back to the 1950s, [More Money Than God] is a fascinating tale of the contrarian and cerebral misfits who created successful, flexible businesses in an otherwise conventional financial world.


[Mallaby is] incisive, informative, and as good a financial writer as he is a storyteller.


Mallaby's book is informative and entertaining. Its accounts of multibillion-dollar transactions and extravagant lifestyles may even entice you to switch careers.


. . . excellent book . . .

Economic Principles

One of the definitive histories and descriptions of hedge funds.

Seeking Alpha

A great story . . . meticulously sourced . . . full of wonderful stories about this brave new world.

Economic Principals

Splendid . . . the definitive history of the hedge fund history.


Persuasive . . . an enticing and believable vision.


Clever, engaging analysis . . . [an] admirable book.

Irish Times

Compelling . . . [Mallaby] brings a keen sense of financial theory to his subject and a vivid narrative style . . . [More Money Than God] is still the fullest account we have so far of a too-little-understood business that changed the shape of finance and no doubt will continue to do so.

Wall Street Journal, Best Titles of 2010

Packed with excellent information and great anecdotes . . . its clarity is an example to other financial authors.

Irish Sunday Business Post


Publishers Weekly

A lively, provocative examination of a little-understood financial realm.

Kirkus Reviews

More Money than God shines a fascinating light on what is still the most obscure route to becoming a billionaire--the mysterious world of hedge funds. Sebastian Mallaby's rollicking tour of industry legends--famous and otherwise--tells the improbable story of A. W. Jones, the vagabond journalist-sociologist and daring anti-Nazi activist who, after the war, would create the first hedged investment fund. From there, we get rip-roaring profiles of investing titans from the full-throated gambler Michael Steinhardt to the bold émigré George Soros and the courtly stockpicker Julian Robertson to the ill-fated intellects of LTCM and the hedge fund stars of the present day. Even as Mallaby entertains he advances an unorthodox yet compelling brief: rich as they are, hedge funds are probably the best vehicles society has for assuming risk. Any who disagree will have to contend with the evidence of the recent Wall Street collapse. If one shudders at the prospect of concentrating risk inside giant banks whose chieftains wager other people's money and cavalierly call for taxpayer bailouts then, as Mallaby points out, hedge funds are a necessary antidote.

Roger Lowenstein, author of The End of Wall Street

Sebastian Mallaby takes us into the secretive world of hedge funds and the result is a wonderful story and an education in finance. The book is full of colorful characters playing high stakes' games. Throughout, with his customary intelligence, Mallaby helps us understand this important transformation of the financial industry.

Fareed Zakaria, author of The Post-American World

When Alfred Winslow Jones started the first hedge fund, he had no idea where it would lead. Sebastian Mallaby, who must be the keenest student of hedge funds anywhere, now does--and he shares it with you in this crackling good read.

Dr. Alan S. Blinder, Gordon S. Rentschler memorial professor of economics and author of The Quiet Revolution: Central Banking Goes Modern

A fascinating history. Mallaby combines vivid description of key personalities and episodes with thoughtful discussion of the sources of advantage for different investment styles in different periods of financial history. I enthusiastically recommend this book to colleagues and students in academia and asset management.

John Y. Campbell, chairman of the Department of Economics, Harvard University, and partner, Arrowstreet Capital

In the News

Sebastian Mallaby on CNBC

A CFR Book. Penguin Press

Daily Beast on More Money Than God

A CFR Book. Penguin Press

BBC Radio: Hedge Funds "Safe to Fail"

A CFR Book. Penguin Press

Sebastian Mallaby on Tavis Smiley

A CFR Book. Penguin Press

Sunday Book Review: Hedge Hogs

A CFR Book. Penguin Press

FT on More Money Than God

A CFR Book. Penguin Press

Sebastian Mallaby on Charlie Rose

A CFR Book. Penguin Press

Independent on More Money Than God

A CFR Book. Penguin Press

Zócalo Public Square: Are Hedge Funds Heroes or Villains?

A CFR Book. Penguin Press

Bloomberg: Hedge-Fund Lackeys Grow Suicidal

A CFR Book. Penguin Press

NYT: David Brooks on More Money Than God

A CFR Book. Penguin Press

WSJ: The Long and Short of It

A CFR Book. Penguin Press

Guardian on More Money Than God

A CFR Book. Penguin Press

Irish Times on More Money Than God

A CFR Book. Penguin Press

Hedge Funds: Obama’s Next Big Headache?

A CFR Book. Penguin Press

Washington Post: Why we need hedge funds to make financial reform work

A CFR Book. Penguin Press

WSJ: Learning to Love Hedge Funds

A CFR Book. Penguin Press

Atlantic: “Go for the jugular”

A CFR Book. Penguin Press

Sebastian Mallaby on Conversations with History

A CFR Book. Penguin Press

Bloomberg TV: Bitcoin Craziest Thing Since Tulip Mania

A CFR Book. Penguin Press

Economist: Over the edge

A CFR Book. Penguin Press

Sebastian Mallaby on Andrea Mitchell Reports

A CFR Book. Penguin Press

NPR: "More Money Than God," But Morally Bankrupt

A CFR Book. Penguin Press

Top Stories on CFR

United Kingdom

CFR experts discuss the results of presidential elections in France and the United Kingdom, as well as what to expect from the 2024 NATO Summit in Washington, DC.

Election 2024

Each Friday, I look at what the presidential contenders are saying about foreign policy. This Week: Republicans are gathering in Milwaukee next week optimistic about their chances in November.  


The surprising shift to the left in snap elections has broken the far-right populist fever in France, but now a crisis of governability looms in Paris that has further weakened President Emmanuel Macron’s grip on power.