Industry Shakeout Clips Hedge Funds

It's a fund-eat-fund world as companies mature, face crunch

By Rob Quinn, Newser Staff

Posted Jun 17, 2008 3:22 AM CDT

(Newser) – A massive shakeout is transforming the world of hedge funds, the Wall Street Journal reports. Tougher market conditions mean smaller funds are merging or closing their doors, and new ones are facing difficulty getting started. The business, which mushroomed from a few hundred firms to 8,000 over a decade, is increasingly dominated by "goliath" funds managing over $5 billion in assets.

There are still fortunes to be made in the hedge fund world but as the big funds keep getting bigger, the industry is beginning to shed its swashbuckling, risk-taking image. Large funds are beginning to act more like conventional institutional investors. The size of the superfunds mean they can now play a bigger role in shaping the financial and business landscape.

Market conditions have spurred a brutal shakeout in the world of hedge funds, with the bigger and more successful funds moving further and further ahead of the pack. (AP Photo/Jin Lee)

Institutional investors are increasingly turning to hedge funds as market conditions sour, and they tend to prefer the bigger "brand-name" funds. (AP Photo/Henny Ray Abrams)

Market conditions are transforming the world of hedge funds, which is increasingly dominated by large funds managing billions of dollars in assets. (Shutter Stock)

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It's a fund-eat-fund world as companies mature, face crunch

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Florida 'Mini-Madoff' Missing With $350M

Police searching for fund manager after clients complain of missing millions

Dow and Dirty: Investor Pushes Porn Hedge Fund

AdultVest, claiming 50% growth, sinks money into porn for iPod, among other things

Battered Markets Crawl Into 2009

2008 finishes as the worst year for the Dow since 1931

Conn. Firm Collected $500M From Madoff's Marks

Fairfield Greenwich didn't deliver promised oversight to clients

Firms Wary of Treasury's Stalled Toxic-Asset Bailout

As Treasury shifts gears from assets to equity stakes, firms shy away

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Industry Shakeout Clips Hedge Funds

It's a fund-eat-fund world as companies mature, face crunch

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OTHER STORIES ON OUR RADAR

asset management • capital • financial markets • hedge fund • investment • capital markets

MOST POPULAR STORIES

[ By Views ]

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More Newser Stories

Florida 'Mini-Madoff' Missing With $350M

Police searching for fund manager after clients complain of missing millions

Dow and Dirty: Investor Pushes Porn Hedge Fund

AdultVest, claiming 50% growth, sinks money into porn for iPod, among other things

Battered Markets Crawl Into 2009

2008 finishes as the worst year for the Dow since 1931

Conn. Firm Collected $500M From Madoff's Marks

Fairfield Greenwich didn't deliver promised oversight to clients

Firms Wary of Treasury's Stalled Toxic-Asset Bailout

As Treasury shifts gears from assets to equity stakes, firms shy away

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Newser By Users

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What is Newser?