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America's 10 Highest-Paid CEOs of 2011 (and How They Earned It)Like most markets, the hedge fund sector "took it on the chin" during the bear market of 2008.
The hedge fund sector lost 18.3% in 2008 -- the sector's worst year on record -- according to data compiled by Hedge Fund Research Inc., as funds found it difficult to adjust to the tumultuous trading and market conditions precipitated by the global financial crisis.
Losses, withdrawals take a toll
Further, losses and withdrawals decreased industry assets to $1.1 trillion in December 2008 from $1.9 trillion in June 2008, according to Bloomberg News, citing Morgan Stanley data.
Economist Richard Felson said investors can interpret the year for hedge funds in two ways.
"One way to look at it would be to say that hedge funds, despite their derivatives, sophisticated trading models, and ability to move money across markets with speed, were not immune to the financial crisis and market turmoil," Felson said. "That would be a data point to argue that the bloom is off the hedge fund rose."
The hedge fund sector lost 18.3% in 2008 -- the sector's worst year on record -- according to data compiled by Hedge Fund Research Inc., as funds found it difficult to adjust to the tumultuous trading and market conditions precipitated by the global financial crisis.
Losses, withdrawals take a toll
Further, losses and withdrawals decreased industry assets to $1.1 trillion in December 2008 from $1.9 trillion in June 2008, according to Bloomberg News, citing Morgan Stanley data.
Economist Richard Felson said investors can interpret the year for hedge funds in two ways.
"One way to look at it would be to say that hedge funds, despite their derivatives, sophisticated trading models, and ability to move money across markets with speed, were not immune to the financial crisis and market turmoil," Felson said. "That would be a data point to argue that the bloom is off the hedge fund rose."
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