Hedge funds: Crisis could be good news for some
Excuse the cliché, but there is a silver lining in the cloud hanging over hedge funds. Many are destined to shut down. But that means more opportunity for those that survive, argues Neil Wilson.
The extraordinary events in global markets over the past few weeks have tested not only the mettle of hedge fund managers, investors and service providers to the limit, but also the creativity of headline writers. And by now you might be thinking all those ‘market-meltdown’ clichés must have been exhausted.
Maybe you should think again – because I have been musing throughout on my own set of clichés, ones that would best and most appropriately describe what has been happening not to markets but to the hedge fund industry in particular during this tumultuous period. I have been pondering clichés like: ‘Shooting the messenger’, ‘Witch hunt’, and, of course, ‘Night of the long knives’.
Although all those clichés might well be true of where hedge funds stand today, there is one I heard recently that I think is coming to sum up the situation for the industry most aptly. And that is ‘Collateral damage’.
The term came up during a discussion I had recently with one of the various people who have been out there doing battle to uphold the industry’s cause with regulators and lawmakers during the recent tumult.