iStockAnalyst, 12 Nov 2008, Ron Haruni
Hedge funds logged billions of dollars in losses during the month of October prompting again massive outflows and unsettling the markets in the process. According to Timesonline - as much as $100 billion was wiped off the value of hedge fund assets last month caused by panic-stricken investors who rushed to withdraw their capital on fears of a worldwide financial meltdown and mounting expectations that the global economy is entering a recession.
Singapore-based industry research firm, EurekaHedge - which tracks hedge fund strategies worldwide, noted that investors redeemed about $60 billion of funds in Oct., while see-sawing market conditions accounted for the remaining $40 billion fall.
Gloomy talk of an industry shakeout is getting louder by each trading session as returns at most funds sink lower. Experts now predict javascript:void(0)that as many as one in four hedge funds will be forced to shut within the next two months, with hundreds of billions eventually being wiped off assets.
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