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Survivors to Benefit from ‘Hedge Fund Industry Life Cycle’

Monday, January 5, 2009 : Permalink

AllAboutAlpha.com – Critics of hedge funds often argue that industry growth has had two negative side-effects: firstly, that less-skilled managers have been attracted to the sector and second, that the number of alpha-generating opportunities has not kept pace with asset inflows.

Assuming these are true, then it could be argued that recent industry shrinkage may lead to new opportunities. In our monthly guest contribution from a member of the Chartered Alternative Investment Analyst (CAIA) Association, Tommaso Sanzin of Hermes BPK Partners suggests that recent headwinds have ushered in a new phase in the “hedge fund industry life cycle”.

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Tags: bpk, chartered alternative investment, chartered alternative investment analyst, headwinds, hermes, industry life cycle, new-opportunities, pace, shrinkage, skilled managers, tommaso

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Hedge funds return to roots as alpha claim refuted

Monday, December 22, 2008 : Permalink

Reuters – Hedge funds are set to return to their roots as niche products for the happy few as they have been unable to deliver the gleaming returns they were promising ever since the start of the credit crisis.

Hedge fund managers have long been flaunting alpha — returns down to their skills to beat markets by using advanced investment techniques — but many were caught short just as any other investor in this year’s protracted downturn.

The industry now faces rapid shrinkage driven by losses of more than 20 percent, as measured by Hedge Fund Research’s daily HFRX index, and redemptions that are predicted at somewhere between "large" and "catastrophic."

"Eighty percent of the hedge fund sector will not be here in three to four months," Robert McAdie, a credit strategist at Barclays Capital, said at a recent briefing. "Levered strategies are dead in this environment."

Funds have delivered worst-ever losses of 17.70 percent in the 11 months to November, according to Hedge Fund Research, as stocks have slumped and volatility has surged.

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Tags: barclays, barclays capital, credit-crisis, downturn, four months, hedge-fund-managers, hedge-fund-research, hfrx index, investment techniques, losses, niche products, quot quot, redemptions, reuters, roots, shrinkage, stocks, strategist, volatility

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Survivors to Benefit from ‘Hedge Fund Industry Life Cycle’

Hedge funds return to roots as alpha claim refuted

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