The Hedge Fund Investment Landscape
A Snapshot in Time
This chapter provides a brief summary of the market conditions hedge fund investors were experiencing at the time of their interview. The information encompasses the period when investors still reeled from the aftereffects of the financial crisis of 2008 until hedge funds began to recover. It provides a context and sets the stage for the top hedge fund investor profiles in Part Two.


Hedge fund investors and managers faced many challenges in the aftermath of the 2008 financial crisis. When we began interviewing the subjects of this book in the first half of 2009, the worst was over, but investors still had to deal with the repercussions.
Marcel Herbst and Georg Wessling of Harcourt AG, writing in their firm’s magazine swissHEDGE, summarized the circumstances aptly:
To say that the hedge fund industry looks back on a very difficult 2008 is an understatement. Starting in the second half of 2008, in an environment of both falling and failing markets, the vast majority of hedge fund strategies suffered unprecedented losses, resulting in the worst year on record for our industry. The industry today is much smaller, has fewer participants, is greatly de-levered, and faced with a more institutionalized and critical client base. Deep and lasting structural changes have occurred, and the restructuring of our universe is still ongoing.1
At the end of 2008, hedge funds had declined an average ...

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