Times Online – Jon Wood, the ballsy and opportunistic hedge fund manager who wagered that there was value in Northern Rock even as the bank was collapsing last autumn, has reportedly lost 85 per cent of his investors’ money.
He is not the only hedgie to be wrong-footed by events. Traders who bet that the crude oil price would continue to strengthen, or that the feeble dollar would continue to weaken, have also lost their shirts in recent weeks.
July was a lousy month for hedge fund returns and August is shaping up as not much better. Most funds are well down in the year to date.
True, mainstream equity investors are no better off. True, too, hedge funds have come through similarly sticky patches before now and still achieved respectable medium-term returns. But this is not a great advertisement for an industry that purports to make money whatever markets are doing.
Making generalisations about hedge funds, however, is rarely a good idea. It is too broad a church.
