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Komfie Manalo, Opalesque Asia:

Adar Capital Partners president Diego Marynberg has predicted that the next two years will see continued adjustment in the hedge fund sector and expects many to disappear as a result of the increased volatility.

Marynberg commented in a statement, "The current crisis of many hedge funds is essentially due to the fact that they took up positions years ago in a market that over-invested at very low interest rates in assets with too much leverage. If we add to that that there will be more and more volatility, the consequence is that many hedge funds will have to disappear in the short term because they will not be able to guarantee returns or justify management fees of over 20 percent."

According to Marynberg, this severe adjustment among hedge funds will extend until 2018. He added that the decline in profitability of some hedge funds since the financial crisis has been most dramatic in developed markets, but not in other regions such as Latin America.

"In Latin America there are some excellent companies such as Petrobras, YPF and Ecopetrol with bonds denominated in U.S. dollars and whose profitability exceeds 8% per annum. To achieve these yields in the U.S., Eu......................

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