Bleak Portrait Of Hedge Fund Future Seen At Summit

Nov 30 2012 | 12:21pm ET

Pessimism among and about hedge funds has never been far from center-stage at this week's Reuters Global Investment 2013 Outlook Summit in London.

Speaker after speaker has offered a rather bleak picture of the industry's future, blaming managers, regulators and the current market environment for hedge funds' woes.

"We're now [in] a world where we recognize that the ability to make money is a lot more difficult and there aren't that many people who can do it," Hermes Fund Managers CEO Saker Nusseibeh said. "There simply aren't enough; it just doesn't exist."

"Lots of hedge funds are not making even a positive return," he continued darkly. "They should be doing 4% to 5%. And they're not."

"Suppose it's the smartest people with the smartest models, and they've had 10 years' practice. If you give me 10 years, I'm sure I can come back and play the piano badly."

Pioneer Investments' Giordano Lombardo warned that new regulations and increasing sophistication among traditional funds have narrowed the space in which hedge funds can distinguish themselves.

"The hedge fund world is going to be more regulated and follow more the rules of the general investment industry," he suggested. "That will force out of the market players not willing to play the game that way."

"The sector is going through a maturity crisis," Lombardo said. "Post-teenager, you have to decide what to do with yourself."

The market environment isn't helping, according to BNP Paribas Investment Partners chief investment officer William De Vijlder.

"Alpha delivery can be very difficult. If you have risk-on, risk-off, it can be more difficult."


In Depth

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.