Highbridge, the big fund firm owned by JP Morgan is cutting staff and restructuring operations. They are not alone. According to the Telegraph:
Investors pulled at least $43bn (£25bn) from US hedge funds in September, according to TrimTabs Investment Research. This is nearly five per cent of the global sector’s estimated $2 trillion in total assets.
Part of the fall in share prices around the world is the result of hedge funds having to liquidate positions to fund redemptions as investors flee the asset class. Last week, Manny Roman, the co-chief executive of GLG, Europe’s biggest hedge fund, warned that thousands of hedge funds are on the brink of failure. He predicted that between 25 and 30pc of the world’s 8,000 hedge funds would disappear “in a Darwinian process’’, either by going bust or deciding that meagre returns are not worth their efforts.
