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Hedgeweek Comment: Optimism in the face of uncertainty

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Who better to show optimism in the light of a global crisis than hedge fund managers?

Who better to show optimism in the light of a global crisis than hedge fund managers? Although the latest data indicates that the global hedge fund industry growth slowed in the second half of 2007 as the credit crisis began to bite, a new survey suggests hedge fund inflows will continue unabated.

According to HedgeFund Intelligence, while global hedge fund industry assets rose to USD2.65trn at the beginning of this year – representing asset growth of 27 per cent from a year ago – growth in the second half was a far more modest 6.6 per cent.

However, another survey released this week suggests that US hedge fund managers aren’t expecting the credit turmoil to have much impact on industry fundraising. According to Rothstein Kass, the hedge fund-focused accounting firm that sponsored the survey, over 90 per cent of more than 300 senior hedge fund managers surveyed say they expect the industry to attract ‘significant’ new money this year.

‘While nearly two-thirds of respondents have a generally negative outlook for the US economy during the balance of 2008, the vast majority of senior hedge fund managers are unfazed by ongoing volatility,’ says Rothstein Kass co-managing principal Howard Altman.

While this sentiment is not a surprise, it will be interesting to see whether or not that optimism be reflected in a positive second and third quarter for hedge funds. One thing is for sure: all will be revealed in due course.

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