Hedge Fund Launches Collapse
Once the darling of the new age investment era, it seems that the investor love affair with hedge funds may be taking a break. It has been revealed that there were fewer hedge funds launched in the first quarter of 2008 than at any other time over the last eight years. The sector has also seen a substantial rise in the number of hedge fund being liquidated, a sign that investors are pulling their money out.
While the term hedge fund is perceived by many as being another name for ‘risky investment’ this is far from true. Even though the big hitting hedge funds which take multi-million dollar gambles tend to hit the headlines, the vast majority offer steady, structured returns with no more risk than traditional investments.
The headlines may state that many of these hedge funds have been hit by the credit crunch and the sub-prime mortgage crisis, but this is also hitting the wider market. The short to medium outlook for hedge funds is not too good but longer term they will come again when investor confidence returns to the market. Like so many other areas of the investment market, investors seem to building their war chests and looking for the right time to pounce when assets values hit the bottom.
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