CHAPTER 9Key Events in the Development of Hedge Funds: Long-Term Capital Management and the Credit and Liquidity Crisis

The hedge fund industry has been shaped by a number of events that led to changes in fundamental aspects of the way hedge funds conduct their business. This section discusses two such events: the collapse of Long-Term Capital Management and the Credit Crisis of 2007–2008.

THE ROLE OF HEDGE FUNDS IN THE CREDIT CRISIS

The credit crisis of 2007–2008 was a defining event for hedge funds, as for the rest of the financial world. The lessons that emerged from the crisis have fundamentally changed the way hedge funds conduct their business in such areas as risk management, redemption requirements, valuation of assets, prime brokerage ...

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