Summary
Implications: 1.A Major Problem - small funds do not have the liquidoty to survive the Long Term. 2.As Fees seem to be the determinable factor: The goal manager has the objective to grow the fund ubtil the inevitable consequence becomes reality - a loss in valuation. 3.Consolidation has an embredded , potential conflict:A well-endowed newer fund vs the large asset base fund. A consequence to be faced at one other time in the future. 4.Diversification by Fund Management involves both the Manager and the Investor - either share the risk and or return:pread the capital between common shares and government bonds. 5.The Industry has , clearly, been overeached - Many funds have leveraged to straddle the the Bull Markets. 6.The structure of the hedge-fund industry has been and will continue to be less stable than conventional fund markets and or management!!!!
Analysis
Commentary:
1.The Hedge Fund Industry has suspended redemptions and, now Investor Funds are captured and or severlly restricted.
2.Leveraging is the salient concept:perfprmance -related fees,soft regulation and Clear relationships with Investment Banking Prime Brokers.
3. The Industry's aggregate leverage has, clearly, been a a determining facrtor and causation of the problem in the Financial Marketplace.
4.Growth of the Industry is , also, been a major contributor in the unsetteling nature of any Investor/Client. Many transactions have become unmanageable and not on the radar screen of management!
5.Most Funds have developed a method of leveraging usuage without concern for the tightened lending restrictions imposed by the Prime Brokers!!!!
