Description

In 2008, the hedge fund industry posted its
worst performance ever. Even if hedge funds significantly outperformed equities, they failed to deliver a positive absolute performance during a period where investors needed it most. Moreover, many hedge funds experienced significant liquidity issues that led them to restrict the liquidity of their funds by implementing gates or side pockets. Finally, the Madoff scandal further tarnished the reputation of hedge funds. By the end of December 2008, some market participants and the financial press had doubts regarding the ability of the industry to survive. Nine months later the consensus opinion is that both hedge funds and fund of funds are there to stay. The aim of this research is to provide an update on the state of the industry.