Tip Sheet: Hedge Fund Headaches: Best Practices for Communicating Through Economic Turmoil

By Dan Simon

According to the most recent research by Eurekahedge, the hedge fund industry shrank by as much as a fifth (or $350 billion) in 2008, with 90% of that decrease coming in the three months leading up to November. Much of the reduction was performance related--a 12% average loss across the industry--but the loss of many additional billions was a result of redemptions: nervous investors withdrawing fistfuls of cash from funds as soon as they were contractually able.