Savvy managers are well-positioned, while the naïve lose their illusions
By Josh Friedlander
Cash is king. That's the message in the markets today, and one that managers are hearing clearly from investors who have decided to take their money, creating a run on the hedge fund bank. Billions of dollars had been pulled out even before the September redemption flurry, from such hedge funds as Harbinger Capital Partners, Highland Capital Management and HBK Capital Management, but more big names have begun to feel the heat. Citadel Investment Group, BP Capital Management, Copper River Management, Millennium Management, and Ramius Capital are just a few of the latest facing redemptions. Hysteria is gripping the markets, with doomsayers estimating that anywhere between 15% and 75% of all funds will go out of business within the next year.
While the hedge funds may find themselves starved for financing, the government won't be there to bail them...