Think we're entering a post-ironic wage? You haven't been paying attention. Used to criticism for caring only about short-term profit, hedge funds are now being faulted for a failure to think short-term enough after losing out badly in last year's volatile markets. Reuters reports that a series of bad bets by hedge funds which were not able to keep up with markets roiled by the euro zone debt crisis pushed the industry as a whole down 5.2 percent last year, according to Hedge Fund Research.
The second year of losses in four for an industry used to chasing rapid gains from takeovers and restructurings looked especially bad because the benchmark S&P 500 stock index was flat. Double-digit gains were the norm in the 1990s for firms that demand high fees for their vaunted acumen.
"Many hedge funds are too focused on the medium term and not enough on price action," said hedge fund manager Philippe Gougenheim, the former head of hedge funds at Swiss fund firm Unigestion, who is now launching his own firm.
Among those that fared the worst were long-short equity funds, which buy shares they expect to rise and sell short those expected to do worse. They lost 8.3 percent last year. Market neutral funds were down 2.1 percent. Commodity funds tumbled 17.3 percent.
Peter Rigg, global head of the alternative investments group at HSBC Alternative Investments, said that "with the benefit of hindsight" some funds had not focused enough on short-term issues…
Find out more at http://www.reuters.com/article/2012/02/17/uk-hedgefunds-markets-idUSLNE81G00A20120217
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