Michelle Celarier, editor, Absolute
At the beginning of 2008, the Absolute Return Billion Dollar
Club tracked 262 American hedge funds with more than $1
billion, for a total of $1.6 trillion a five-fold
increase in five years. By the start of 2009, the number had
slid to 218 firms, managing $1.13 billion, back to where it was
in July of 2006.
The collapse of the financial industry in 2008 that started
on Wall Street has shaken hedge funds to their core. As the
world staggered under the realisation that these are the most
difficult economic times since the Great Depression, hedge
funds managed to outperform the major indices. Alternative
investments are designed to profit when mainstream investments
cannot, and hedge funds proved their mettle in this regard. The
US Absolute Return US Equity Index mean was down 20%, compared
with 38% for the S&P 500. The...