Heyday of hedge funds is over, Citadel’s Ken Griffin predicts
Thursday, October 23, 2008 : PermalinkChicago Tribune – "The key change in the next decade is that policymakers around the world have chosen the winners and losers," Griffin said at a Wednesday panel. "The winners are the banking system."
By selecting commercial banks to become the centerpiece of the financial industry, the government closed the era of investment banks and hedge funds with highly leveraged balance sheets.
That should translate into safer and more conservative investing choices, but also less innovation by financiers and higher interest rates for borrowers, he predicted.
As roughly 8,000 hedge funds respond by reducing the size of their multitrillion-dollar balance sheets, their role in the system will inevitably be diminished, Griffin said.
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