According to data firm Hedge Fund Research, the $2 trillion hedge fund industry has been hit hard by the credit crisis.More funds have left the industry, and fewer have entered, over the past six months than collectively last year.
In April and May it seemed the hedge fund market was rebounding as it experienced gains of 1.2% and 2.11% respectively. In June, however, losses returned, with the average hedge fund slipping 0.68%. Through June, the average hedge funds is off 0.75%.
In particular, funds honoring steep redemptions or adhering to convertible arbitrage strategies created huge losses for clients.Despite dismal progress in some areas, small groups of hedge funds that specialize in betting on stock declines, saw gains, increasing 8.6% in June and 12.2% since January.
