Hedge Funds Performance

The math on fund shutdowns: Losses could prove catastrophic


The math is simple but sobering. A hedge fund that lost half its assets last year needs to gain 100% before it reaches its high-water mark and collects incentive fees again. In balmier times, most hedge funds needn't pay mind to that reality, because losses are usually contained. Today, lots of hedge funds do need to pay attention. Some 28% of funds in the HedgeFund Intelligence/Absolute Return database lost more last year than they have ever produced in any 12-month period, which means they need to have enough socked away to survive at least a year - if