Hedge Funds Skip Riskier Gambles

Returns are down as more cautious investors hold sway
By J. Kelman,  Newser User
Posted May 22, 2007 11:52 AM CDT

(Newser) – Are hedge funds going soft? The swashbuckling industry has long been known for its high-risk, high-rewards MO, but returns are down, on average trailing the S&P 500 last year. The reason, BusinessWeek suggests, may be that alternative investments are no longer so alternative. And other non-traditional investments, like private equity, are feeling the same push.

As conservative institutional investors supplant wealthy individuals, hedge-fund managers find themselves playing to more risk-averse clients, like pension funds. “They are managing the assets in order to keep the assets and not taking enough risk to create market-beating returns,” says AIG’s head of hedge fund strategy. "This is a natural evolution to a professionally managed asset class," says one analyst. (Read more hedge fund stories.)

We use cookies. By Clicking "OK" or any content on this site, you agree to allow cookies to be placed. Read more in our privacy policy.
Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.