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had enormous resources. In hedge funds, however, he felt a level playing field did exist, and that was attractive.

He gets personal satisfaction from seeing the team work together and from the knowledge that they have built a culture with little bureaucracy. "It is the consistent cooperation and focus on one goal. People enjoy working here."

Rajaratnam likes to travel with his family. Every year, they visit two countries they have never been to. "It's like an adventure." He is also intrigued by international politics, particularly with Sri Lanka, his homeland, which is undergoing civil war. On the sports side, he likes to play tennis and squash and to swim.

"I find that playing sports fuels my competitive bent and desire to win, while time with my family provides a balanced perspective on life, reminding me that there is more to life than portfolio returns."

INDUSTRY OUTLOOK.

Rajaratnam is not certain that there is a new- or old-generation distinction between hedge fund managers, but he does see the hedge fund industry increasingly move toward specialization. "Each hedge fund manager has to understand his edge."

Rajaratnam feels institutional investors will assert themselves. More transparency will develop because of investor demand. Investors want more accessibility to the organization.

He also expects a shakeout will occur since there are too many hedge funds, many of which are run by long-only managers using considerable leverage. "It is almost too easy now. And there are so many excesses."