Regardless of opinion, gay marriage is now the law of the land and the nation must begin the difficult task of sorting out the various legal, financial and other implications inherent in the Supreme Court’s decision.

The focus here will be on the potential economic impact of legalized gay marriage, particularly as it relates to the hedge fund industry. Before the scope of any impact can be assessed, it would be helpful to have some sense of how many of our fellow Americans identify as gay, lesbian, and bi-sexual.

Best Available Data

The most current credible statistics on the subject develop from a National Health Interview Survey (NHIS) in 2013 given to 34,557 adults aged eighteen and above. The results of this survey were released in July, 2014 by the Centers for Disease Control and Prevention (CDC). The survey reveals that only 1.6% of the adult population self-identifies as gay and lesbian, while .7% self-identify as bi-sexual.

Running the Numbers

The total adult population in the U. S. stands at 209,128,094. The NHIS survey suggests that 1.6% of this number is gay and lesbian, which translates to 3,346,048 men and women. Another .7% of the adult population is bi-sexual which computes to 1,463,897. Taking some liberties, we will estimate that one-half or 731,948 of this bi-sexual group have the potential to enter into a same-sex marriage. This results in a total universe of 4,077,996 gay, lesbian and bi-sexual individuals that may or may not choose to marry.

While it is difficult to determine what percentage of the gay, lesbian and bi-sexual community will opt for marriage, the adult U.S. population in general marries at the rate of 52%. Therefore, it is probable that of the total gay, lesbian and bi-sexual population, only 2,120,558 might be expected to marry if we assume a similar statistical rate.

Impact on Hedge Funds

Since we are viewing this subject through the prism of hedge funds, we have to consider the financial parameters of a qualified investor and how this relates to the number of gay, lesbian and bi-sexual members of the country. Of the 4,077,996, the demographics suggest that 4.2% will have a net worth of $1 million or greater. That would be about 171,276 potential hedge fund clients. But, and this can’t be stressed too strongly—these individual would be potential clients regardless of the Supreme Court’s decision because this statistic addresses individual probabilities … not couples.

Those from the gay, lesbian and bi-sexual community entering into the marriage contract may, by virtue of combined income and assets, become qualified investors. But even this difficult to quantify subset, is not likely to exceed 42,411.

Impact on Hedge Fund Jobs

If we accept the low end of the estimates on the number of hedge fund firms in the United States and peg the number at 7,000, this suggests a maximum of 6 new investors for each hedge fund in the nation. Sadly, this is hardly a number that will trigger a hiring spree among the nation’s hedge funds.

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In case you hadn’t heard, Showtime has inked a deal with Andrew Ross Sorkin, of Too Big to Fail fame, for twelve shows in its new series … Billions. The fictional drama features a New York U.S. attorney as the protagonist and, that’s right, a hedge fund billionaire as the antagonist.

Paul Giamatti, who played Ben Bernanke in the HBO production of Too Big to Fail, will take on the role of the U. S. Attorney Chuck Rhoades.  Damian Lewis, who portrayed Major Richard Winters in Band of Brothers and Nicholas Brody in Homeland, will assume the antagonist’s role as Bobby Axelrod.

The story-line promises to follow the power and politics played out in Wall Street’s investment firms.

What’s Troubling

It is difficult to find fault with Sorkin’s financial and journalistic bona fides. Sorkin is co-anchor of CNBC’s Squawk Box, founder of Deal Book, New York Times financial columnist and two-time Gerald Loeb award recipient, one of which he earned authoring his best-selling book, Too Big to Fail, published in 2009.  Sorkin, quoted in the Hollywood Reporter, said, “We’ve long believed that the world of Wall Street is fertile ground for a drama.”

By “we” … Sorkin is acknowledging his co-creators Brian Koppelman and David Levien. Koppellman and Levien have worked together before, as the creative forces behind such notable films as Rounders, Runner Runner and Runaway Jury.

In short, there is a good deal of talent behind this pay television series – the first in which hedge funds figure prominently. Its potential is undeniable. Those in the industry can only hope that hedge funds and hedge fund managers will get a fair shake.

It is mildly concerning that these 12 episodes will air in the months leading up to the 2016 presidential election. Hillary Clinton has already attempted to paint the industry in a negative light by suggesting it has unfair tax advantages, even going so far as to imply that hedge fund billionaires pay less in taxes than truck drivers. While this is patently false, and earned her two Pinnochios, this bell is impossible to un-ring.

Potential voters will now be treated to twelve, hour-long fictional characterizations of the hedge fund industry and its players. Hopefully, the series will offer a fair portrayal of the industry and not devolve into a tool for either political party.

Hedge Fund Jobs

Clearly, no hedge fund jobs will be won or lost as a consequence of Showtime’s series. However, it is important for the industry to be aware of its impending release. Just as politicians followed West Wing and House of Cards, “hedgies” should follow Billions.

If it is an honest portrayal, as hoped, it has the potential to introduce the industry to thousands of new investors and inspire others to pursue a career in hedge funds. However, if it the portrayals are skewed, who better to raise the alarm than the tens of thousands who work with and within the hedge fund industry?

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Hedge Fund Managers as Political Targets

June 1, 2015

The Forbes 400 list of the wealthiest Americans reveals that only 7 of the top 100 are hedge fund managers and the first hedge fund manager on the list is George Soros, ironically the most left-leaning multi-billionaire on the planet. So why are hedge fund managers under attack? Public Perception Hedge funds are largely misunderstood […]

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A Hedge Fund Job Could be a Paradigm Shift Away

May 18, 2015

While opportunities for hedge fund careers are not abundant, they do exist. Past posts have touched on specific personality characteristics hedge fund recruiters seek when considering prospective candidates. These desirable traits include a competitive spirit, the ability to thrive on stress, self-discipline, an analytic mind, decisive, articulate, focused, and, goal oriented personalities. Hedge fund jobs […]

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Reinsurers Skeptical of Hedge Fund Investment

May 4, 2015

Hedge funds have always enjoyed a presence in the insurance sector but Warren Buffet has declared recent hedge fund forays to be a precursor to the decline of major reinsurance companies. What Has Changed Hedge funds have invested in catastrophe bonds and other insurance-linked securities for decades. However, Buffett’s concern is the recent phenomenon in […]

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Has Yellen’s Rhetoric Painted the Fed into a Corner?

April 20, 2015

Uncertainty regarding the timing of Federal Reserve interest rate hikes continues to churn as evidenced by increased market volatility. Federal Reserve Chair Janet Yellen has long insisted that any rate hike will be predicated on the nation’s unemployment figures and March yielded a paltry 126,000 new jobs. This is a dramatic 57 percent decrease from […]

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The Redeeming Social Value of Hedge Funds

April 6, 2015

The term hedge fund is synonymous with sinister and secretive in the minds of many. However, this much maligned industry controls in excess of $3 trillion as represented by its collective assets under management and it continues to grow this impressive figure year-over-year. Hedge funds have earned this unenviable public ire through no fault of […]

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