Survival of the fittest


A small group of $100 billion firms could dominate a $7.44 trillion hedge fund landscape by 2013. Will high returns persist, or could the industry finally experience a colossal correction and see both performance and assets plunge? What will the industry look like and will it ultimately be a healthier place?

If $100 billion giants dominate the future, can high returns persist?

By Sarah Wood

Always defined by elite status, with sky-high fees, superrich investors, brilliant managers and broad freedoms to invest as it pleased, the U.S. hedge fund industry over the past several years looked as if it might be turning into a more democratic place. For starters, low barriers to entry and an influx of institutional money desperate for better returns in the wake of the tech bust produced an unprecedented increase in the number of funds and a fivefold