Funds of Hedge Funds Financial Crisis
Funds of Hedge Funds Manage to Survive Financial Crisis
Funds of hedge funds have survived the financial meltdown, contrary to many predictions. Funds of hedge funds may have survived the worst but the industry took some heavy damage, causing many FOFs to shut down. Most of the largest funds of hedge funds have managed to stay afloat through the crisis, according to recent data.
Investors started pulling out their money in the middle of 2008 and, apart from a small respite at the end of last year, they continued taking it away for the next 21 months and counting, according to data provider Hedge Fund Research.
But a list of the largest funds of hedge funds managers, ranked by the assets they run for pension schemes, and prepared by investment consultancy Towers Watson, shows most of them have survived.
Of the 20 largest fund of hedge funds managers at the end of 2006, 15 were still there at the end of last year.
Two of 2006’s largest managers were hit hard by the crisis: Union Bancaire Privée Asset Management and Bank of New York Mellon.
Union Bancaire Privée Asset Management, a division of a Swiss private bank, was managing $2.3bn of pension scheme assets at the end of 2006, placing it 17th in Towers Watson’s list; but at the end of last year, it had dropped out of Towers Watson’s top 50. Source
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