Investing

The Hedge Fund Industry Begins To Crack

Hedge funds had their worst first quarter on record. Some have already started to fail, and others are likely to .

According to the FT "This year has seen a series of hedge fund blow-ups as banks pulled leverage or investors demanded their money back from illiquid strategies." While the news is awful for hedge fund investors, it may be worse for banks. Selling off a failing fund’s assets may not yield enough to cover loans. That, in turn, creates more write-offs.

No virtuous cycle here.

Douglas A. McIntyre

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