efficient markets leave fund managers fewer opportunities to add value
The hedge fund universe has expanded substantially since the start of the millennium. During the three-year equity bear market period between March 2000 and March 2003 leading funds of hedge funds (FoHFs) consistently produced positive returns while many equity long-only investors were experiencing losses of 30%-40%. Demand for hedge funds began to pour in from wealthy private clients and intermediaries. This increase in demand was matched by the launch of many new hedge funds. Between 2000 and 2004, the number of new managers grew at a rate of 20%-25% each year. That resulted in the univ...
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