Innovation gathers pace as industry seeks salvation


Alarmists have long feared that the hedge fund industry would collapse under the weight of its own success, with runaway growth leading to mediocrity and certain death.

Although returns overall have gotten off to a poor start this year, assets continue to pour into hedge funds as our biannual survey of the "billion dollar club" of U.S. managers shows. This elite fraternity now numbers 176 and its members run $645 billion.

But the industry has never been short on sharp strategists, so it is no wonder that there are signs everywhere that hedge funds