Europe: A year of two halves

Wed Apr 16, 2008



Nick Evans, editor, EuroHedge

If ever a year could be described as one of two halves, 2007 was surely it. In Europe, as in all developed markets, life for hedge funds changed dramatically halfway through the year – and it has remained changed ever since.

A generally benign financial market and economic climate in the first half of 2007 began to turn increasingly volatile and treacherous from July onwards as the US sub-prime mortgage market finally rolled over, the credit crunch started to spread and chaos ensued in the banking sector.

By the end of June, the EuroHedge Composite Index return stood at 6% for the year. By the end of the year, it had risen to just 7% – underlining how difficult market conditions had become in the second half of a very turbulent year as virtually all asset classes became contaminated by the turmoil in the credit markets.

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