It’s no understatement to say that the markets had a challenging year in 2007, with both banks and hedge funds under pressure. Nevertheless, despite a few high-profile casualties, the hedge funds generally came through pretty well – and some, such as the funds managed by Paulson & Co, produced amazing and unprecedented gains. So can we hope for – or expect – more of the same in 2008?
It certainly doesn’t look like getting any easier in 2008. There were without doubt some extremely difficult months during 2007 – notably in August and then again in November. But this year has started off with a month in January that was if anything even more treacherous, featuring highly bearish conditions and some wild intra-month swings both up and down, and especially for hedge funds trading equities in Europe and Asia.
In Europe, the EuroHedge Composite index was down...
