Hedge Fund Investing: A Practical Approach to Understanding Investor Motivation, Manager Profits, and Fund Performance

Summary

Overall, the industry has regained much of the ground it initially lost in 2008 and the beginning of 2009. It is responding to investor demands and growing. Hedge fund products remain in very high demand due to their relative, if not absolute, return characteristics and meet the return targets and volatility profile of many large pension plans and endowments. They also offer alternatives to HNWI faced with a volatile stock market and record low fixed-income yields. The industry has grown from under $100 billion in 1990 to over $2 trillion today. During that time, it has gone through several distinct periods, including a period of crisis in 2008 and 2009. Today, the industry is poised to continue to grow, albeit at a slower pace and with more attention to the demands of institutional investors. Hedge funds also remain very important clients of Wall Street firms due to the significant commissions and fees the sector pays annually.