Bloodbath ahead - Pension & Investments – Christine Williamson – via Portfolio.com – 30 September 08
Big differences in hedge fund performance could put weakest ones on endangered list
Sources said they expect the body count to total as many as 2,000 hedge funds and 500 hedge funds of funds between now and the end of March…
Most hedge funds operate on an end-of-quarter deadline for requests from clients to have their money returned. If experts’ predictions of very large collective redemptions come true, managers will have to liquidate their holdings en masse, pushing down prices and forcing many smaller hedge funds or those with poor returns out of business. The wave of closures could span six months, likely beginning in earnest in November and December at the end of the typical 45- or 65-day waiting period when fund managers have to return investor cash.
Not to mention the banks that are still on edge (National City, Sovereign, etc.) and the fact that we haven’t even started on the insurance companies, pension funds, wealth mangers, etc. who bought this toxic waste. And then of course at some point we’ll have to deal with the actual economic impact of the credit crunch.
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