Preqin has taken a look at how the hedge funds have changed in the six years since the global financial crisis. The most significant development is the volume of funds that have launched since 2008, even in the face of increasing regulation and industry criticism. Please see below for the main takeaways, as well as a link to the full report:
- As of the end of 2008, there were over 5,100 active hedge funds globally. Since the crisis, a further 5,900 have launched.
- Institutional capital represented 43% of all hedge fund assets pre-crisis, whereas now these institutions account for 63%.
- Macro and CTA funds were two of the best performing strategies in the 12 months to August 2008, but in the same period to August 2014 they have been two of the worst.
Then and Now: The Hedge Funds in 2008 and 2014
The collapse of Lehman Brothers in September 2008 can be considered the very height of the global financial crisis (GFC) of 2007/2008. Six years on, policy makers, institutions and asset managers have worked to introduce new regulations and reform outdated business practices in order to avoid another major economic downturn, and restore stability and growth to the global economy. Lehman’s bankruptcy and the wider effects of the credit crisis have had a lasting impact on the hedge fund sector, and the industry has undergone many changes in order to win back investor confidence and meet the needs of a growing audience of institutional investors allocating capital to hedge funds. Here we examine the hedge fund landscape in September 2008, at the height of the GFC, and today, six years on, to highlight some of these changes.