Handbook of Hedge Funds

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Conclusions

It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.

Charles Darwin

Finally! You have made it, as we have now reached the end of our hedge fund journey. The trip was obviously long, but we hope it was also instructive and, to some extent, pleasant. Together we have explored and surveyed a large number of topics and dispelled some inaccurate perceptions. Some of these topics were relatively simple and probably well known. Others were less familiar or more complex. But all were aiming at the same goal, i.e. to increase the knowledge and understanding of what is really going on in the hedge fund industry.

Since the original concept created by Alfred W. Jones, hedge funds have indeed come a long shaky and shady way. After operating in almost complete secrecy for several decades, hedge funds only acquired public prominence in the 1992 when George Soros successfully assaulted the British pound. Later, the 1997 Asian crisis and the shocking bankruptcy of Long Term Capital Management threatened financial markets world wide, sparked talk of stricter regulation, and reinforced the view that hedge funds were taking on excessive risks. This put many investors off hedge funds for good, and at the end of 1998, in the opinion of most market participants the days of hedge funds were clearly counted. But this pessimistic view was obviously wrong. Almost 10 years later, hedge funds are still around, more numerous than ...