Hedge funds face first net negative year since 2002

Losses of recent months large enough to wipe out all new business for this year

Hedge fund losses in recent months have wiped out all new business for 2008, potentially leaving the industry net negative for the first year since 2002. Clive Paine, head of UK business development at HSBC Alternative Investments, says there are currently around 10,000 hedge funds in existence with something like $1.7trn in assets. Looking forward, he believes this number will clearly fall through consolidation but highlights several positive factors for the single strategy and fund of hedge fund world. In the short term, Paine said the short selling bans and forced selling to meet h...