Hedge fund liquidations Trimming the hedge

Judging by the number of fund closures, 2005 was a bleak year for the hedge fund industry. About twice as many firms liquidated their funds and returned cash to investors as in 2004. But the trend may not be as bad as the headline figures suggest. Certainly, industry performance was no worse in 2005 than in 2004. Thanks in the main to strong year-end returns, the average hedge fund returned close to 10%. That’s not particularly compelling, but not a disaster either. And the problems were largely...