Hedge Funds Plummet, But Could Be Worse

August 10, 2011 James Heinsman Hedge Fund News

2008 Way Worse For Hedge Funds Than Today

While the financial situation definitely isn’t exactly looking rosy for hedge funds these days and they have definitely been witnessing some pretty hefty drops, things could be worse. One just needs to take a look back to a mere three years ago when the situation for the hedge funds was pretty much up the creek without a paddle.  It’s simply not like that today.  Yet there is still “pain,” according to a recent article in Reuters.  But then again, with the global economy as it is, why should hedge funds be left out of the mix?

S&P 500 Drop

Just earlier this week witnessed a plummet of the S&P 500 more than 6 percent.  This figure has had a huge impact on investors from all classes, ranging from the average Joe in the street to the wealthiest of hedge fund executives.  Of course, what’s been going on in Europe hasn’t exactly helped much either.

Nonetheless, even with all this, as well as the “downgrade of America’s triple-A credit rating,” it isn’t thought that things will be as bad as what happened in 2008.  So that has to be some kind of good news.  Still, the jury is still out as to what kind of negative impact this  will all have on the financial situation of 2011 and its impact on the hedge fund industry.  One only needs to look at the figures for last month to see that the hedge funders weren’t exactly smiling – at best they were up less than 2 percent, at worst they were going down, according to figures released from Hedge Fund Research.

And there haven’t been too many bottles of champagne being opened by those who thought they were smart enough to “outsmart the housing collapse and battered financial sector.”  It seems they might have to approach their investors – tails between their legs – and admit the huge sufferings they incurred as well.

It’s too early to tell of course, but while 2011 may not be all that great for the hedge funds, it’s unlikely it’s going to be quite as bad as the situation they befell three years ago.

 

Hedge Fund Research, Hedge Funds, Reuters, S&P 500,

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