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From Sagar Chakraverty, Opalesque Asia:
In a recent report called Hedge Funds: 2009 Review and 2010 Outlook, Moody’s Investor Services said that the hedge fund industry would be healthier in the near future. However, the rating agency expressed caution, especially as some funds are still dealing with the aftermath.
Moody's believes the industry will successfully adapt to the new market conditions, if another major economic shock or regulatory shifts does not derail the recovery process. In the 2010 world as seen through Moody’s eyes – with higher investor confidence in fund allocation, net inflows, more start-ups – fund managers will continue expanding their product offerings beyond hedge funds, testing different markets, but their fees will remain depressed.
If year 2008 would go down in the history of hedge fund industry as ‘the year of fund managers’ nightmare’ – a year marked by nothing but erratic markets, no investor confidence, rampant liquidity squeeze, systemic shocks, collapse of the unthinkable like Lehman, colossal frauds like Madoff’s, and unprecedented levels of redemptions - then perhaps year 2009 would be marked by fund managers’ adaptability.
2008 – a year that was all red
By the end of Q3-08, the investors worldwide pressed the panic button, as liquidity dried up completely. From $2.1tln AUM in 2007, it nose-dived to $1.5tln in 2008, thereby wiping out $600bn of assets. Funds of hedge funds (FoHFs) suffered a m...................... To view our full article Click here
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