Billionaire - Hedge fund industry could lose big in next year

Torn Dollar

The $2.9tril hedge-fund industry may lose about a quarter of its assets in the next year as performance slumps, said Tony James, Blackstone’s billionaire president.

“It’s kind of a day of reckoning that we face here,” James said Wednesday in an interview with Bloomberg TV Canada’s Pamela Ritchie at a conference in Toronto. “There will be a shrinkage in the industry and it will be painful. That’s going to be pretty painful for an awful lot of places.”

Bloomberg News reports that the hedge-fund industry is having its worst start to a year in performance and investor withdrawals since global markets reeled after the financial crisis. Third Point, the hedge-fund firm founded by Dan Loeb, last month said the industry is in the first stage of a “washout” after “catastrophic” results this year.

Hedge funds have lost 1.8% this year, according to Hedge Fund Research’s global index, the poorest performance since 2008. The industry had net outflows of $16.6bn in the past two quarters, the most since 2009, according to HFR. In 2015, 979 funds closed, more than any year since 2009, according to the research firm.

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Hedge Funds May Lose 25% of Assets, Blackstone’s James Says

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