Hedge Fund Manager Says Redemption Fears are Overblown

Barton Biggs of Hedge Fund Traxis Partners says fears of massive withdrawals from hedge funds are overblown. Biggs credits hedge funds' good collective performance during the bear market of 2002-2003. By last year the hedge fund industry managed $1.9 trillion worldwide. But this year hedge funds have performed poorly as a group, leading to questions about investors' willingness to leave assets in underperforming funds. This is particularly true for market-neutral and other supposedly low-risk and uncorrelated hedge fund strategies. Now these trading strategies are highly correlated to the broader markets and mired in volatility. However, Biggs feels fears of hedge fund redemptions are likely overblown.

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