Friday, 25 July 2014
Last updated 8 hours ago
Oct 23 2008 | 12:14pm ET
Given the state of the economy and hedge fund industry, it’s no surprise that the talk at hedge fund conferences is full of dark, ugly predictions.
“In a fairly Darwinian manner, many hedge funds will simply disappear,” GLG Partners co-CEO Emmanuel Roman said today at the Hedge 2008 conference in London, with about 30% of the industry becoming the victims of a sort of natural selection.
The disaster will also force the hands of regulators, whose efforts should make it more difficult for new hedge funds to get off the ground, according to Roman, a development he favors.
Right now, “someone can graduate from college on a Friday an start a hedge fund on a Monday” in the U.S., he said.
“There need to be some scapegoats, and they are going to go hunt people,” he said, calling new regulations “overdue.”
Speaking at the same conference, Nouriel Roubini, the New York University economist, also painted a bleak picture, telling participants, “things will get much worse before the getter better. I fear the worst is ahead of us.”
“We’ve reached a situation of sheer panic,” Robini said, warning that hundreds of funds will fail as the crisis continues. “Don’t be surprised if policymakers need to close down markets for a week or two in coming days.”
Still, Roman did try to cheer things up a bit: For those hedge funds that survive, there are some “once-in-a-lifetime” opportunities.
“At some point, people will say this isn’t 1929 to the power of 10,” Roman said.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…