What does the future hold for hedge funds and third-party assets in the wake of the developments at BlueCrest? David Stevenson provides some bleak predictions.
News that BlueCrest has decided to return all third-party client assets is no great surprise. The writing has been on the wall for hedge funds for quite some time as their old business model, sold aggressively to wealthy investors, simply does not work anymore. Investors were told: "Buy hedge funds because they will deliver all-weather absolute returns, with low volatility, providing the perfect 'alternative asset'." But nobody really believes this patter anymore - and all the old 2 and 20 charging structures have been vanishing as a result. As I have written previously in Investment ...
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