Investors in need of cash or traumatized by the Bernard Madoff scandal will continue to redeem hedge fund shares in droves, HedgeWorld News predicts, shrinking the industry by 30% this year to as low as $1 trillion. That was the size of the industry in 2005.
I think well have two quarter of significant redemptions, Chris Manswer, global head of hedge funds-of-funds at AXA Investment Managers, told Reuters. Because of Madoff and very difficult performance, a lot of funds will be receiving high levels of redemptions. Hedge funds averaged declines of 19% last year.