Hedge funds regularly close or return money to investors, so the decision last month by David Muschel to return capital to investors in his Jemmco fund ought to have been unexceptional. But the explanation he gave gives pause for thought. Some of the fund’s strategies, he said, simply cannot perform in today’s environment.
He singles out decimalization, low volatility and ?enormous pressure to deploy capital to hedge funds that, once modest in size, have grown to billions of dollars in assets, many competing to exploit the same inefficiencies.
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