Hedge Fund Business Gets Worse, Nice While It Lasted

Photo of Douglas A. McIntyre
By Douglas A. McIntyre Updated Published
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AngrybearThe number of hedge funds topped 10,000 earlier this year. Watch for about 3,000 of those to be gone soon.

According to Bloomberg, "Almost a third of hedge funds will shut or merge after the $1.5 trillion industry posted its worst ever performance this year."

That may be bad for hedge funds, but it is worse for the broader market.

Most of the weak funds will be selling into an already weak market to bring in cash to cover client resumptions.

On top of that, a number of the funds used leverage to increase the "value" of their investments. Banks who loaned that money want it back.

When that note is due, it just causes more selling.

It would not be surprising if several hundred billion in investments are being dumped to get out whatever capital is left as funds close.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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