Since the short selling ban has been enacted around the world, the basis for many hedgefund strategies have been destroyed. And then you put up commodity crash, alot of hedgefunds are down huge this year. Even pickens lost a billion dollers. ESL lamperts fund is down huge, sac is is down huge. so which is the first one to go, and what would be the ramifications. Another bailout this time, but for hedgies?
given the huge volatility across all markets my bet is that james simon's medallion fund is up about 20% in september :eek:
couple of things. only those 799 or 800 fin stocks have been banned. 2nd, thats temporary and they r more than likely to remove that. they won't just go out of business because of that.
90% of investment bank traders = bull market heroes 75% of hedge funds = bull market heroes (assuming they're not specialised funds but even then....) 90% of retail clients = bull market heroes No wonder around 10% of market participants make 90% of the money (give or take). The answer to your question is that probably 50% of Hedge Funds won't be around in 2 years. This is because most of them promised 'absolute returns' but as those in the know predicted, including me of course all they deliver are relative ones. A basket of ETFs in all the main asset sectors would have probably easily beaten the average hedge fund return over the last 5 years and the next 5 years. As for who will close shop, just look at the past glossy society pages and in the past gushing interviews in Business Week, Forbes etc. The managers that appeared there will the the main ones to fall.........
Yeah, that's the man to watch out for. I could be wrong, but what I've read there is a meritocracy there and very little group-think. So consider: 1. large head start against other quant funds (aren't they the first?). Compounding of strategies and knowledge. 2. large group of bright minds. Continues to attract more talent. 3. meritocracy. innovative culture. low group-think. 4. fairly large fund size - can deploy many positions of arbitrary size. That's the fund to beat.
About 350 funds shut down in the first half of the year, a number that may double by year-end, Hedge Fund Research reported. Among the biggest casualties is Dwight Anderson's New York-based Ospraie Management LLC, which is closing its $2.8 billion commodities fund after losses of almost 40 percent this year. Kensington Down Citadel's $13 billion Kensington fund, which seeks to profit by trading everything from stocks to bonds to energy, dropped 15 percent this year through Sept. 19, according to investors. The multistrategy fund's sole losing year was in 1994, when Griffin, now 39, was down about 4 percent. Two funds with combined assets of $3 billion gained 22 percent and 30 percent. SAC Capital's multistrategy fund declined 3.5 percent this year, the worst showing since Cohen, 52, started the firm in 1992. TPG-Axon dropped 18 percent this year through Sept. 15. It hasn't had a losing year since Singh, 39, a former head of in- house trading at New York-based Goldman Sachs Group Inc., started the firm in 2005 with TPG Inc., the Fort Worth, Texas- based private-equity manager. September Volatility Even managers who've made money this year are having a difficult time. Philip Falcone, 46, was up 42 percent at the end of June in his seven-year-old Harbinger Capital Partners Fund. The gain shriveled to about 2 percent as of Sept. 19. The New York-based fund's smallest annual return was about 10 percent in 2004. http://www.bloomberg.com/apps/news?pid=20601109&sid=aYMbQvrlfUe4&refer=home
Recently, their fund for 'in-house' money was up huge, while their outside money fund was flat...made me think that the real 'genius' was akin to 'allocation magic', voile!, all the winners go here, and everything else goes there. Gee, aren't we smart?! Yeah, it takes the top-of-yer-class to achieve that trick. Keeping funds under management under that scenario, now that is genius! Either that, or PT Barnum strikes again.
There screwed without the use of leverage. were going to have to move a world that is far less leveraged