Ospraie Down
Sep 3rd, 2008 | Filed under: Hedge Fund Industry Trends, Today's Post
I had the pleasure of attending a breakfast meeting this morning during which several hedge fund luminaries (and myself, the token non-luminary) were tasked with selecting the recipients of one of the industry’s many annual awards. With the announcement of Ospraie’s crash still hot off the press, the discussion inevitably turned toward the ailing state of the industry as a whole.
While it’s easy to assume that hedge funds are falling out of the sky, the news this week is actually somewhat mixed as usual. In fact, in its usual annoying way, the hedge fund industry continues to defy easy characterization.
First, there’s the issue of hedge fund closures. Reuters reported last week that:
“Running a hedge fund was long considered the crown jewel in finance but this summer a growing number of managers have called it quits, unable or unwilling to keep going during one of the industry’s worst-ever years.”
One might easily be excused for assuming that less funds equals a shrinking industry. But as we’ve discussed several times on these pages, consolidation is a necessary stage in the maturation of any new industry - particularly one with such dramatic economies of scale.
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